Lesson 4 Variable Costing Individual Assignment[1]

Lesson 4 Variable Costing Individual Assignment[1] -...

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Lesson 4 Variable Costing Individual Assignment Write your solutions to the following textbook problems. Submit them for evaluation via the dropbox. Complete: E16-1, E16-5, E16-7, and E 16-8, (p. 744-749). Exercise 16-7: Selected Financial Ratios 1. Gross margin percentage : Gross Margin/Sales $127,500/ $420,000= 30.4% (rounded) 2. Current Ratio: Current assets/current liabilities $115,000/$50,000= 2.3 3. Acid-test Ratio: (Cash + Marketable securities + Accounts receivable + Short- Term notes receivable) / current liabilities $6,500 + $0 + $35,000 + $0 / $50,000 = 0.83 4. Debt to equity Ratio: Total liabilities/Stockholders’ equity $130,000/$170,000= 0.76 (rounded) 5. Average collection period: 365 days/Accounts receivable turnover Accounts Receivable Turnover= $420,000/$25,000= 16.8 365/$16.8= 22 days (rounded) 6. Average sale period: 365 days/Inventory turnover Inventory Turnover=$292,000/$60,000= 4.9 (rounded)
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Unformatted text preview: 365/4.9= 74 days (rounded) 7. Times interest earned ratio: Earnings before interest expense and income taxes/interest expense $38,000/$8,000= 4.75 8. Book value per share: (Total stockholders equity – Preferred stock) / Number of common shares outstanding $170,000-$0/$6,000= $28.00 per share (rounded) Exercise 16-8: Selected Financial Ratios for Common Stockholders 1. Earnings per share: (Net income- Preferred dividends) / Average number of common shares outstanding $21,000-$0/$6,000= $3.50 per share 2. Dividend payout ratio: Dividends per share/ Earnings per share $2.10 per share/$3.50 per share= 60% 3. Dividend yield ratio: Dividends per share/ Market Price $2.10 per share/ $42per share= 5% 4. Price-earnings ratio: Market price per share/ Earnings per share $42 per share/$3.50 per share= 12...
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This note was uploaded on 06/16/2010 for the course ACCT 3000 taught by Professor Luide during the Spring '10 term at Alaska Anch.

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Lesson 4 Variable Costing Individual Assignment[1] -...

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