Dahn Corporation has provided the following financial data: Balance Sheet December 31, Year 2 and Year 1
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Question:
Dahn Corporation has provided the following financial data:
Balance Sheet | ||||||
December 31, Year 2 and Year 1 | ||||||
Assets | Year 2 | Year 1 | ||||
Current assets: | ||||||
Cash | $ | 227,000 | $ | 150,000 | ||
Accounts receivable, net | 134,000 | 130,000 | ||||
Inventory | 150,000 | 130,000 | ||||
Prepaid expenses | 83,000 | 80,000 | ||||
Total current assets | 594,000 | 490,000 | ||||
Plant & equipment, net | 769,000 | 840,000 | ||||
Total assets | $ | 1,363,000 | $ | 1,330,000 | ||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 200,000 | $ | 180,000 | ||
Accrued liabilities | 63,000 | 70,000 | ||||
Notes payable, short term | 71,000 | 60,000 | ||||
Total current liabilities | 334,000 | 310,000 | ||||
Bonds payable | 290,000 | 290,000 | ||||
Total liabilities | 624,000 | 600,000 | ||||
Stockholders’ equity: | ||||||
Common stock, $5 par value | 400,000 | 400,000 | ||||
Additional paid-in capital | 50,000 | 50,000 | ||||
Retained earnings | 289,000 | 280,000 | ||||
Total stockholders’ equity | 739,000 | 730,000 | ||||
Total liabilities & stockholders’ equity | $ | 1,363,000 | $ | 1,330,000 | ||
Income Statement | |||
For the Year Ended December 31, Year 2 | |||
Sales (all on account) | $ | 1,370,000 | |
Cost of goods sold | 850,000 | ||
Gross margin | 520,000 | ||
Operating expenses | 482,692 | ||
Net operating income | 37,308 | ||
Interest expense | 21,000 | ||
Net income before taxes | 16,308 | ||
Income taxes (35%) | 5,708 | ||
Net income | $ | 10,600 | |
Dividends on common stock during Year 2 totaled $1,600. The market price of common stock at the end of Year 2 was $2.37 per share.
The company’s operating cycle for Year 2 is closest to:
The company’s average collection period for Year 2 is closest to:
Related Book For
Financial Statement Analysis
ISBN: 978-0078110962
11th edition
Authors: K. R. Subramanyam, John Wild
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