Pepper Company provided the incomplete financial statements shown below as well as the following additional information:

All sales during the year were on account.

There was no change in the number of shares of common stock outstanding during the year.

The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change during the year.

Selected balances at the beginning of the current year were:

Accounts receivable $ 210,000

Inventory $ 320,000

Total assets $ 3,832,500

Selected financial ratios computed from the statements below for the current year are:

Earnings per share $ 3.00

Debt-to-equity ratio 0.960

Accounts receivable turnover 14.0

Current ratio 3.00

Return on total assets 10%

Times interest earned ratio 7.75

Acid-test ratio 1.18

Inventory turnover 6.0

Compute the missing amounts on the company's financial statements

 

Transcribed Image Text:

Pepper Company Income Statement For the Year Ended March 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income $ 3,500,000 50,000 Pepper Company Income Statement For the Year Ended March 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income $ 3,500,000 50,000

Answer rating: 100% (QA)

Compute Cost of Goods Sold COGS We can use the gross margin and sales figures to find COGS Gross Margin Sales COGS Given Gross Margin 3500000 COGS We ... View the full answer