The Retail Group, Inc. Statement of Financial Position December 31, 20X9 (all am
ID: 2568286 • Letter: T
Question
The Retail Group, Inc.
Statement of Financial Position
December 31, 20X9
(all amounts in millions)
Assets Liabilities and Stockholders’ Equity .
Current assets: Current liabilities:
Cash………………..……………………. $12.0 Accounts payable………… $9.0
Accounts receivable (net)……. 9.0 Salaries payable………….. .8
Marketable securities........... 5.5 Dividends payable……….. .6
Prepaid insurance................ .5 Interest payable…………. .5
Inventory.......................... 7.2 Total current liabilities…. 10.9
Total current assets.............. 34.2
Assets Liabilities and Stockholders’ Equity .
Property, plant, & equipment: Long-term liabilities:
Equipment (net).................. 5.0 Notes payable…………... 12.0
Buildings (net)………………..…….. 11.0 Bonds payable….……….. 14.0
Land……………………................. 4.0 Total long-term liabilities…… 26.0
Total property, plant, & equipment 20.0 Total liabilities….…………… $36.9
Other assets: Stockholders’ equity:
Investments……………………………... 8.0 Common stock……….….. 15.0
Patents………………………………..……. .5 Retained earnings………. 10.8
Total other assets……………………….…. 8.5 Total stockholders’ equity…..…… 25.8
Total liabilities and
Total assets…………………............... $62.7 stockholders’ equity….……….. $62.7
The Retail Group, Inc.
Income Statement
For the Year Ended December 31, 20X9 (all amounts in millions)
Sales……………………………………………………….…………$85.0
Cost of goods sold…………….……………………………… 51.0
Gross profit………………………………………………….….. 34.0
Selling expenses:
Sales salaries and commissions…… $8.2
Insurance expense……………………... 1.5
Advertising expense…………………….. 2.5
Utilities expense…………………………. 2.4
Depreciation expense: equipment…. 1.0
Delivery expense…………………………. .2
Total selling expenses…………………….. $15.8
General and administrative expenses:
Executive and administrative salaries.. $7.9
Utilities expense………………………………... 2.5
Rental expense……………………………………. .7
Depreciation expense: building……….... .6
Patent amortization expense………………. .6
Total general and administrative expenses… 12.3
Total operating expenses………………………………………………. 28.1
Operating income…..…………………………………………………… 5.9
Nonoperating items:
Interest revenue………………………………… ($.2)
Interest expense…………………………………. 1.4
Nonoperating expense (net)………………………………………… 1.2
Income before income taxes……………………………………….. 4.7
Income tax expense…………………………………………………….. 1.9
Net income………………………………………………..………………… $2.8
ADDITIONAL INFORMATION
800,000 weighted average shares of common stock were issued and outstanding throughout 20X9.
The accounts receivable balance (net of uncollectible accounts) on December 31, 20X8 was $8,400,000. All sales are credit sales.
The inventory balance on December 31, 20X8 was $6,600,000.
$2,000,000 in total dividends were declared during 20X9.
Total stockholders’ equity on December 31, 20X8 was $25,000,000.
Total assets on December 31, 20X8 were $58,600,000.
The market price per share of common stock on December 31, 20X9 was $49.
There was no preferred stock.
QUESTIONS
5. 20X9 Days’ Sales in Inventory
6. 20X9 Accounts Receivable Turnover
7. 20X9 Average Collection Period
8. 20X9 Operating Cycle
9. 20X9 Debt Ratio
10. 20X9 Debt to Equity Ratio
Explanation / Answer
Answer =1) Days Sales in Inventory = Ending inventory / Cost of Goods Sold X 365 Ending Income = $ 7.20 /' By '/' Cost of Goods Sold = $ 51.00 = 0.14 X 365 = 51.53 Days Sales in Inventory = 51.53 Days Answer =2) Account recivable Turnover = Net Cresit Sales / Average Account Recievable Average Account Recivable = ($ 8,400,000 + $ 9,000,000) / 2 = 87,00,000 Average Account Recivable = 8.7 Million Net Credit Sales $ 85.00 /' By '/' Average Accoount Receivable $ 8.70 = 9.77 Account recivable Turnover = 9.77 Average Collection period = 365 Days / Account recivable Turnover Answer =3) Days 365 /' By '/' Account recivable Turnover = 9.77 = 37.36 Average Collection perioid = 37.36 Answer =4 Operating Cycle = DaY'S Sale of inventory + Days sales of ooutstanding Operating Cycle = 51.53 Days + 37.36 Days = 88.89 Days Answer =5) Debt Ratio = Total Liabilities / total Assets Debt Ratio = $ 36.90 / $ 62.70 Debt Ratio = 0.59 answer =6) Debt To Equity Ratio = Total Liabilities / Total Equities Debt To Equity Ratio = $ 36.90 / $ 25.80 Debt To Equity Ratio = 1.43
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.