The following information pertains to Sampson Company. Assume that all balance s

Question

The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets Cash and short-term investments $ 45,000 Accounts receivable (net) 25,000 Inventory 11,000 Property, plant and equipment 210,000
Total Assets $291,000


Liabilities and Stockholders Equity Current liabilities $ 50,000 Long-term liabilities 90,000 Stockholders equitycommon 151,000
Total Liabilities and Stockholders Equity $291,000


Income Statement Sales $120,000 Cost of goods sold 55,000 Gross profit 65,000 Operating expenses 30,000
Net income $ 35,000


Number of shares of common stock 6,000 Market price of common stock $20 Dividends per share .50

Explanation / Answer

Cost of goods sold/Inventory = 55,000/11.000= 5.0

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