Willingham Company has the following comparative balance sheet data. WILLINGHAM

Question

Willingham Company has the following comparative balance sheet data.

WILLINGHAM COMPANY
Balance Sheets
December 31

2014
2013 Cash
$ 10,280
$ 29,810 Receivables (net)
70,150
50,430 Inventory
61,000
50,350 Plant assets (net)
204,470
193,280

$345,900
$323,870 Accounts payable
$49,640
$59,630 Mortgage payable (15%)
101,440
101,440 Common stock, $10 par
135,330
121,730 Retained earnings
59,490
41,070

$345,900
$323,870 Willingham Company has the following comparative balance sheet data. Compute the following ratios at December 31, 2014. (Round all answers to 1 decimal place, e.g. 1.6 .)

Explanation / Answer

CURRENT RATIO = CURRENT ASSETS/CURRENT LIABILITIES

=(10280+70150+61000)/49640

=2.85

ACID TEST RATIO = (CURRENT ASSETS-INVENTORY - PREPAYMENTS)/CURRENT LIABILITIES

=(141430-61000)/49640

=1.62

RECIEVABLES TURNOVER = NET SALES/AVERAGE DEBTORS

= (410070-20670)/[(70150+50430)/2]

=6.46

INVENTORY TURNOVER = COST OF GOODS SOLD/AVERAGE INVENTORY

=185500/[(61000+50350)/2]

=3.33

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.