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Andrej [43]
2 years ago
6

The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Cu

rrent assets: Cash $ 21,000 Accounts receivable, net 220,000 Merchandise inventory 320,000 Prepaid expenses 8,000 Total current assets 569,000 Property and equipment, net 860,000 Total assets $ 1,429,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 280,000 Bonds payable, 9% 390,000 Total liabilities 670,000 Stockholders’ equity: Common stock, $10 par value $ 110,000 Retained earnings 649,000 Total stockholders’ equity 759,000 Total liabilities and equity $ 1,429,000
Castile Products, Inc. Income Statement For the Year Ended December 31 Sales $ 3,010,000 Cost of goods sold 1,110,000 Gross margin 1,900,000 Selling and administrative expenses 640,000 Net operating income 1,260,000 Interest expense 35,100 Net income before taxes 1,224,900 Income taxes (30%) 367,470 Net income $ 857,430 Account balances at the beginning of the year were: accounts receivable, $210,000; and inventory, $280,000. All sales were on account.
Required: Compute the following financial data and ratios:
1. Working capital.
2. Current Ratio (round to 2 decimal places)
3. Acid-Test Ratio (round to 2 decimal places)
4. Debt-to-equity Ratio (round to 2 decimal places)
5. Times interest earned Ratio (2 decimal places)
6. Average collection period (days)
7. Average sale period (days)
8. Operating cycle (Days; round intermediate calculations and final answer to 1 decimal place)
Business
1 answer:
Delicious77 [7]2 years ago
3 0

Answer and Explanation:

The computation is shown below;

1.

Working capital = Current Asset - Current Liabilities

= $569,000 - $280,000

= $289,000

2.

Current ratio  = Current Asset ÷ Current Liability

= $569,000 ÷ $280,000

= 2.03

3.

Acid-test (quick) ratio  = {(Current Asset - Inventory - prepaid expense) ÷ Current Liabilities }

= {{$569,000- $320,000 - $8,000) ÷ ($280,000)}

= 0.86 times

4.

Debt-Equity ratio   = Total Liability ÷ Shareholders' Equity

= $670,000 ÷ $759,000

= 0.88 times

5.

Times interest earned   = EBIT ÷ Interest Charges

= ($1,224,000 + $35,100) ÷ ($35,100)

= 35.87 times

6.

Average collection period

= 365 ÷ ($3,010,00 ÷ $215,000)

= 26 days

The $215,000 comes from

= ($210,000 + $220,000) ÷ 2

= $215,000

7. The average sales period is

= 365 ÷ ($1,110,000 ÷ $300,000)

= 99 days

The $300,000 comes from

= ($280,000 + $320,000) ÷ 2

= $300,000

8. The operating cycle is

= 99 days - 26 days

= 73 days

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Bette and Jamal are partners at a management consulting firm.
kodGreya [7K]

Answer:

Jamal

Explanation:

Given that

Number of required slides = 50 slides

Creating slides Per hour = 15 slides

Bill amount per hour = $750

So by considering the above information, Bette's opportunity cost of creating slides would be

= Bill amount per hour ÷ creating slides per hour

= $750 ÷ 15 per hour

= $50

For making 50 slides, the opportunity cost would be

= $50 × 50 slides

= $2,500

And, Jamal opportunity cost is 30% lower, so it would be  

= $50 - $50 × 30%

= $50 - $15

= $35

And, the billing rate is 25% higher, so it would be

= $750 + $750 × 25%

= $750 + $187.50

= $937.50

So in one hour, it would be

= $937.50 ÷ 35 slides

= 26 slides

Based on the creating slides, the Jamal gains a competitive advantage over Bette

4 0
2 years ago
A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's una
kompoz [17]

Answer:

Accounts receivable $361,000 debit

Allowance for uncollectible accounts $560 debit

Net Sales $806,000 credit

0.4% of credit sales are uncollectible = 0.4% x $806,000 = $3,224

adjusting entry:

December 31, 202x

Dr Bad debt expense 3,224

    Cr Allowance for doubtful accounts 3,224

Allowance for doubtful accounts is a contra asset account that reduces accounts receivable.

8 0
3 years ago
According to the situational leadership theory, if employees are unwilling and unable, the appropriate leadership style in this
Yuri [45]

Answer:

directive

Explanation:

Directive leadership is a form of leadership, often employed by managers or supervisors in mostly a situation whereby the task to be carried out or done is intricate or difficult and the employees assigned to it, are unwilling and unable. This style of leadership is considered the most appropriate or effective according to situational leadership theory.

Hence, the correct answer in this situation is DIRECTIVE.

8 0
2 years ago
Deciding how to use computers to improve business processes is the most important strategic decision a firm can make.a. Trueb. F
Harman [31]

Answer:

a

Explanation:

computers make work easy and faster

4 0
1 year ago
Suppose you deposit $2,262.00 into an account today. In 11.00 years the account is worth $3,855.00. The account earned ____% per
zmey [24]

Answer:

4.97 %

Explanation:

Data and Calculation :

PV = - $2,262.00

N =  11.00

FV = $3,855.00

P/YR = 1

PMT = $0

I/YR = ? 4.97 %

THUS,

The account earned 4.97 % per year.

3 0
2 years ago
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