The comparative statements of Dubai Company are presented below.
All sales were on account. The allowance for doubtful accounts was $3,200 on December 31, 2017, and $3,000 on December 31, 2020.
Required:
1- Compute the following ratios for 2021. (Weighted average common shares in 2021 were 62,500.)
Earnings per share.
Return on common stockholders’ equity.
Return on assets.
Current.
Acid-test.
Accounts receivable turnover.
Inventory turnover.
Times interest earned.
Asset turnover.
Debt to assets.
2. Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2020 to 2021 of Dubai Company.
Extracted text: Bonds payable Total liabilities 210,000 413,500 200,000 387,400 Stockholders' equity Common stock (S5 par) Retained earnings Total stockholders' equity Total liabilities and stockholders’ equity 280,000 276,700 556,700 465,400 $970,200 S852,800 300,000 165,400
Extracted text: Dubai Company Income Statement For the Year Ended December 31 2021 $1,828,500 1,010,500 818,000 516,000 302,000 2020 S1,750,500 996,000 754,500 479,000 275,500 Net sales Cost of goods sold Gross profit Selling and administrative expense Income from operations Other expenses and losses Interest expense 17,000 285,000 75,000 $ 210,000 14,000 261,500 Income before income taxes Income tax expense Net income 77,000 $ 184,500 Dubai Company Balance Sheets December 31 Assets Current assets Cash 2021 2020 $ 60,100 $ 64,200 50,000 102,800 115,500 332,500 520,300 $852,800 Short-term investments 64,000 122,800 118.000 364,900 605.300 $970,200 Accounts receivable (net) Inventory Total current assets Plant assets (net) Total assets Liabilities and Stockholders’ Equity Current liabilities Accounts payable Income taxes payable $160,000 43,500 203,500 $145,400 42,000 187,400 Total current liabilities