BRIDGEPORT INC. BALANCE SHEET DECEMBER 31, 2017 BRIDGEPORT INC. INCOME STATEMENT

Question

BRIDGEPORT INC.
BALANCE SHEET
DECEMBER 31, 2017

BRIDGEPORT INC.
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2017

Presented below is information related to Bridgeport Inc.

BRIDGEPORT INC.
BALANCE SHEET
DECEMBER 31, 2017

Cash $45,100 Notes payable (short-term) $50,100 Receivables $110,000 Accounts payable 31,900    Less: Allowance 14,900 95,100 Accrued liabilities 5,000 Inventory 171,500 Common stock (par $5) 258,700 Prepaid insurance 7,900 Retained earnings 143,100 Land 20,200 Equipment (net) 149,000    $488,800 $488,800

BRIDGEPORT INC.
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2017

Sales revenue $1,402,700 Cost of goods sold    Inventory, Jan. 1, 2017 $199,300    Purchases 794,000    Cost of goods available for sale 993,300    Inventory, Dec. 31, 2017 (171,500 )    Cost of goods sold 821,800 Gross profit on sales 580,900 Operating expenses 169,400 Net income $411,500

Explanation / Answer

If any doubt please comment

Ans 1 Formula Calculation Ratio -1 Current ratio Current Assets/Current Liabilities 319600/87000 3.67 times -2 Inventory turnover COGS/Inventory 821800/171500 4.79 times -3 Accounts receivable turnover Credit sales/Accounts receivable 1402700/95100 14.75 times -4 Earnings per share Net Income/Avg outstanding common stock 411500/51740 7.95 -5 Profit margin on sales Net income/sales*100 411500/1402700*100 29.34 % -6 Return on assets on December 31, 2017 Net Income/Total assets*100 411500/488800*100 84.19 % working Balance sheet Assets Cash $45,100 Receivables $110,000    Less: Allowance 14,900 95,100 Inventory 171,500 Prepaid insurance 7,900 Total current Assets 319,600 Land 20,200 Equipment (net) 149,000 $488,800 Notes payable (short-term) $50,100 Accounts payable 31,900 Accrued liabilities 5,000 Total current Liabilities 87,000 Common stock (par $5) (51740 shares*$5) 258,700 Retained earnings 143,100 ans 2 1 No effect as no cash transactuion is involved 2 Weaken as cash current asset is reduced 3 Improve- As current asset and current liabilities both will decrease but decrease in denominator brings improvement in current ratio 4 No effect as cash will incraese and accounts recivable will decrease with the same amount 5 Weaken- As current liabilities incraeses 6 No effect as accounts payable decreases and short term note payable increases

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