Delta Company November 30 Balance Sheet 2013 2014 Cash $160 $300 Accounts Receiv

Question

Delta Company November 30 Balance Sheet 2013 2014 Cash $160 $300 Accounts Receivable $420 $480 Inventory $500 $730 Equipment $2,000 $2,500 Less Accumulated Depreciation $(1,000) $(1,200) Total Assets $2,080 $2,810 Accounts payable $280 $310 Other current liabilities $300 $500 Notes payable Long Term $600 $700 Common Stock $400 $600 Retained Earnings $500 $700 Total liabilities and stockholders' equity $2,080 $2,810 Income statement Net sales $1,550 $1,840 Cost of goods sold 920 1060 Gross margin 630 780 Expenses:    Salaries 200 250    Warehousing costs 90 120    Advertising 120 70    Taxes 45 75    Total expenses 455 515 Net income $175 $265 Calculate the following for the year 2014: 1. Current Ratio 2. Accounts Receivable Turnover 3. Inventory Turnover Delta Company November 30 Balance Sheet 2013 2014 Cash $160 $300 Accounts Receivable $420 $480 Inventory $500 $730 Equipment $2,000 $2,500 Less Accumulated Depreciation $(1,000) $(1,200) Total Assets $2,080 $2,810 Accounts payable $280 $310 Other current liabilities $300 $500 Notes payable Long Term $600 $700 Common Stock $400 $600 Retained Earnings $500 $700 Total liabilities and stockholders' equity $2,080 $2,810 Income statement Net sales $1,550 $1,840 Cost of goods sold 920 1060 Gross margin 630 780 Expenses:    Salaries 200 250    Warehousing costs 90 120    Advertising 120 70    Taxes 45 75    Total expenses 455 515 Net income $175 $265 Calculate the following for the year 2014: 1. Current Ratio 2. Accounts Receivable Turnover 3. Inventory Turnover

Explanation / Answer

1. Current Ratio = Current assets/Current liabilities = (300+480+730)/(310+500)= 1.86 2. Accounts Receivable Turnover = Net credit sales/Average receivables = 1840/(420+480)/2= 4.09 3. Inventory Turnover =Cost of goods sold/Average inventory = 1060/(500+730)/2= 1.72 Note: Answers have been rounded off to 2 deciaml places

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.