December 31, 2019 December 31, 2018 Cash Accounts receivable (net) Inventory Acc
ID: 2597284 • Letter: D
Question
December 31, 2019 December 31, 2018 Cash Accounts receivable (net) Inventory Accounts payable Notes payable Common stock, $100 par Retained earnings $ 32,200 81,000 203,400 55,100 39,700 401,600 119,200 $ 15,800 127,900 186,000 94,100 69,300 401,600 103,200 Additional information: 1. The inventory turnover is 6.0 times. 2. The return on common stockholders' equity is 21%. The company had no additional paid-in capital. 3. The receivables turnover is 12.3 times. 4. The return on assets is 19%. 5. Total assets at December 31, 2018, were $609,200. Compute the following for Cheyenne Corp.. (Round all answers to 0 decimal places, e.g. 2,150.) (a) Cost of goods sold for 2019. (b) Net credit sales for 2019. (c) Net income for 2019. (d) Total assets at December 31, 2019.Explanation / Answer
Question a). Solution :- Average inventory = (Ending inventory + Beginning inventory) / 2
= (203400 + 186000) / 2
= 389400 / 2
= $ 194700.
Inventory turnover ratio = Cost of goods sold / Average inventory.
6 = Cost of goods sold / 194700
Cost of goods sold = 6 * 194700
Cost of goods sold = $ 1168200.
Conclusion :- Cost of goods sold for Year 2019 = $ 1168200.
Question b). Solution :-
Average accounts receivable = (Ending accounts receivable + Beginning accounts receivable) / 2
= (81000 + 127900) / 2
= 208900 / 2
= $ 104450.
Accounts receivable turnover ratio = Net credit sales / Average accounts receivable
12.30 = Net credit sales / 104450
Net credit sales = 12.30 * 104450
Net credit sales = $ 1284735.
Conclusion :- Net credit sales for Year 2019 = $ 1284735.
Question c). Solution :-
Return on common stockholders' equity = Net income / common stockholders' equity
0.21 = Net income / 401600
Net income = 401600 * 0.21
Net income = $ 84336.
Conclusion :- Net income for Year 2019 = $ 84336.
Question d). Solution :-
Return on total assets = Net income / Total assets at Dec. 31, 2019.
0.19 = 84336 / Total assets at Dec. 31, 2019.
Total assets at Dec. 31, 2019. = 84336 / 0.19
Total assets at Dec. 31, 2019. = $ 443874 (approx).
Conclusion :- Total assets at Dec. 31, 2019 = $ 443874.
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