The financial statements for Castile Products, Inc., are given below: Castile Pr
ID: 2405569 • Letter: T
Question
The financial statements for Castile Products, Inc., are given below:
Castile Products, Inc.
Balance Sheet
December 31
Assets
Current assets:
Cash
$
22,000
Accounts receivable, net
260,000
Merchandise inventory
380,000
Prepaid expenses
8,000
Total current assets
670,000
Property and equipment, net
880,000
Total assets
$
1,550,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities
$
270,000
Bonds payable, 9%
370,000
Total liabilities
640,000
Stockholders’ equity:
Common stock, $5 par value
$
150,000
Retained earnings
760,000
Total stockholders’ equity
910,000
Total liabilities and equity
$
1,550,000
Castile Products, Inc.
Income Statement
For the Year Ended December 31
Sales
$
3,080,000
Cost of goods sold
1,483,500
Gross margin
1,596,500
Selling and administrative expenses
620,000
Net operating income
976,500
Interest expense
33,300
Net income before taxes
943,200
Income taxes (30%)
282,960
Net income
$
660,240
Account balances at the beginning of the year were: accounts receivable, $180,000; and inventory, $310,000. All sales were on account.
Required:
Compute the following financial data and ratios:
1.
Working capital.
2.
Current ratio. (Round your answer to 2 decimal places.)
3.
Acid-test ratio. (Round your answer to 2 decimal places.)
4.
Debt-to-equity ratio. (Round your answer to 2 decimal places.)
5.
Times interest earned ratio. (Round your answer to 2 decimal places.)
6.
Average collection period. (Use 365 days in a year. Round your answer to 1 decimal place.)
7.
Average sale period. (Use 365 days in a year. Round your intermediate and final answer to 1 decimal place.)
8.
Operating cycle. (Round your intermediate calculations and final answers to 1 decimal place.)
The financial statements for Castile Products, Inc., are given below:
Explanation / Answer
1) Working capital = 670000-270000 = $400000
2) Current ratio = 670000/270000 = 2.48:1
3) Acid test ratio = (22000+260000)/270000 = 1.04:1
4) Debt equity ratio = 640000/910000 = 0.70:1
Note : Please post whole question in the group of 4-4 requirements
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.