[The following information applies to the questions displayed below] Tungsten Co

Question

[The following information applies to the questions displayed below] Tungsten Company, Inc, sells heavy construction equipment. There are 14,500 shares of capital stock outstanding. The annual fiscal period ends on December 31. The following condensed trial balance was taken from the general ledger on December 31, 2014: Deblt Credi count Titles Cash Accounts receivable (net) Inventory, ending Operational assets Accumulated depreciation Liabilities Capital stock Retained earnings, January 1, 2014 Sales revenue Sales returns and allowances Cost of goods sold Selling expense Administrative expense Bad debt expense Sales discounts Income tax expense $34,700 14,900 53,000 41,300 $ 18,200 25,800 72,200 15,380 5,800 80,200 15,900 5,900 1,700 7400 9,580 $280.380$ 280,380

Explanation / Answer

TUNGSTEN COMPANY INC. Income Statement For the Year Ended December 31,2014 Sales Revenue $148,800.00 Less: Sales Return and Allowance $5,800.00 Net Sales $143,000.00 Cost of Goods Sold -$80,200.00 Gross Profit $62,800.00 Operating Expense Administrative Expense $15,900.00 Bad Debt Expense $1,700.00 Selling Expense $15,900.00 Sales Discount $7,400.00 -$40,900.00 Net Profit Before Tax $21,900.00 Income Tax Expense -$9,580.00 Net Profit After Tax $12,320.00 Computation of Receivable Turnover Ratio Net Sales= $143000 Average Receivable=($17100+$14900)/2=16000 Receivable Turnover Ratio= Sales/ Average Receivable =($143000/$16000)=8.937 Times

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