Ex. 190
Selected information from the comparative financial statements of Fryman Company for the year ended December 31, appears below:
2014 2013
Inventory$ 140,000$160,000
Accounts receivable (net) 180,000200,000
Total assets1,200,000800,000
Non-current liabilities340,000300,000
Current liabilities140,000110,000
Net credit sales1,520,0001,200,000
Cost of goods sold750,000630,000
Interest expense40,00025,000
Income tax expense60,00029,000
Net income160,00085,000
Instructions
Answer the following questions relating to the year ended December 31, 2014. Show computations.
1.Inventory turnover for 2014 is __________.
2.Times interest earned in 2014 is __________.
3.The debt to total assets ratio for 2014 is __________.
4.Accounts receivable turnover for 2014 is __________.
5.Return on assets for 2014 is __________.
Ex. 191
The financial statements of Grogan Company appear below:
GROGAN COMPANY
Comparative Statements of Financial Position
December 31,
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Assets 2014 2013
Property, plant and equipment (net)..........................$260,000$300,000
Inventory..............................................50,00070,000
Accounts receivable (net)..................................50,00030,000
Short-term investments....................................15,00060,000
Cash.................................................. 25,000 40,000
Total assets ............................................$400,000$500,000
Equity and liabilities
Share capital – ordinary....................................$150,000$150,000
Retained earnings........................................ 110,000 70,000
Bonds payable..........................................80,000160,000
Accounts payable........................................ 20,000 30,000
Short-term notes payable.................................. 40,000 90,000
Total equity and liabilities ..................................$400,000$500,000