Constructing Statements from Ratio Data

The following are the financial statements for Timber Company, with almost all dollar amounts missing:

TIMBER COMPANY

Balance Sheet

December $31,2012$ Cash $?$ Current liabilities $?$ Accounts receivable $($net$)?10\%$ Bonds payable $144,000$ Inventory $?$ Common stock $?$ Equipment $($net$)?$ Retained earnings $48,000$ Total Assets $$586,000$ Total Liabilities andStockholders' Equity $$586,000$

TIMBER COMPANY

Income Statement

For the Year Ended December $31,2013$ Sales revenue $?$ Cost of goods sold $?$ Gross profit $?$ Selling and administrative expenses $?$ Income before interest expense and income taxes Interest expense $?$ Income before income taxes $?$ Income tax expense $(35\%)?$ Net income $$71,200$

The following information is available about Timber Company's financial statements:

$1.$ Quick ratio, $1\mathrm{.}65.$

$2.$ Current ratio, $3\mathrm{.}15.$

$3.$ Return on sales,$7\mathrm{.}5$ percent.

$4.$ Return on common stockholders' equity $($common stockholders' equity at January $1$ was $$342,000),20$ percent.

$5.$ Gross profit percentage, $30$ percent.

$6.$ Accounts receivable turnover $($accounts receivable $($net$)$ at January $1$ were $$97,200),10$ times.

$7.$ The interest expense relates to the bonds payable that were outstanding all year.

Required

Compute the missing amounts, and complete the financial statements of Timber Company. $($Hint: Complete the income statement first.$)$

TIMBER COMPANY

Income Statement

For the Year Ended December $31,2012$ Sales revenue Cost of goods sold Gross profit Selling and administrative expenses Income before interest expense and income taxes Interest expense Income before income taxes Income tax expense Net income $$71,200$

TIMBER COMPANY

Balance Sheet

December $31,2012$ Cash Current liabilities Accounts receivable $($net$)8\%$ Bonds payable $144,000$ Inventory Common stock Equipment $($net$)$ Retained earnings $48,000$ Total Assets $$586,000$ Total Liabilities andStockholders' Equity $$586,000$

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