Chapter14Solution - Excel Templates Chapter 14 Student Name...

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Excel Templates Chapter 14 Student Name: <Type your name here> Class: <Type your class here>
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Problem 14-11 Given Data: Requested loan amount $300,000 MODERN BUILDING SUPPLY Comparative Balance Sheet This Year Last Year Assets Current assets: Cash $90,000 $200,000 Marketable securities -0- 50,000 Accounts receivable, net 650,000 400,000 Inventory 1,300,000 800,000 Prepaid expenses 20,000 20,000 Total current assets 2,060,000 1,470,000 Plant and equipment, net 1,940,000 1,830,000 Total assets $4,000,000 $3,300,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $1,100,000 $600,000 Bonds payable, 12% 750,000 750,000 Total liabilities 1,850,000 1,350,000 Shareholders' equity: Preferred stock, 4,000, $4 no par 200,000 200,000 Common stock, 50,000, $4 no par 500,000 500,000 Retained earnings 1,450,000 1,250,000 Total shareholders' equity 2,150,000 1,950,000 Total liabilities and shareholders' equity $4,000,000 $3,300,000 MODERN BUILDING SUPPLY Comparative Income Statement and Reconciliation This Year Last Year Sales $7,000,000 $6,000,000 Less cost of goods sold 5,400,000 4,800,000 Gross margin 1,600,000 1,200,000 Selling and administrative expenses 970,000 710,000 Operating income 630,000 490,000 Interest expense 90,000 90,000 Net income before taxes 540,000 400,000 Income taxes (40%) 216,000 160,000 Net income 324,000 240,000 Dividends paid: Preferred dividends 16,000 16,000 Common dividends 108,000 60,000 Total dividends paid 124,000 76,000 Net income retained 200,000 164,000 Retained earnings, beginning of year 1,250,000 1,086,000 Retained earnings, end of year $1,450,000 $1,250,000
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Typical ratios: Current ratio 2.5 Acid-test ratio 1.3 Average collection period 18 days Average sale period 50 days Debt-to-equity ratio 0.75 Times interest earned 6.0 Return on total assets 10% Price-earnings ratio 9 Accounts receivable, beginning of last year $350,000 Inventory, beginning of last year $720,000
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<Type your name here> <Type your class here> Excel Templates Chapter 14 Problem 14-11 Part 1 MODERN BUILDING SUPPLY Ratios This Year Last Year Current assets $2,060,000 $1,470,000 Current liabilities $1,100,000 $600,000 Working capital $960,000 $870,000 Current assets $2,060,000 $1,470,000 ÷ Current liabilities $1,100,000 $600,000 Current ratio 1.87 to 1 2.45 to 1 Quick assets $740,000 $650,000 ÷ Current liabilities $1,100,000 $600,000 Acid-test ratio 0.67 to 1 1.08 to 1 Sales on account $7,000,000 $6,000,000 ÷ Average receivables $525,000 $375,000 Accounts receivables turnover 13.3 times 16.0 times Average collection period: 27.4 days 22.8 days Cost of goods sold $5,400,000 $4,800,000 ÷ Average inventory $1,050,000 $760,000 Inventory turnover 5.1 times 6.3 times Average sales period 71.0 days 57.8 days Total liabilities $1,850,000 $1,350,000 ÷ Shareholders' equity $2,150,000 $1,950,000 Debt-to-equity ratio 0.86 to 1 0.69 to 1 Earnings before interest and taxes $630,000 $490,000 ÷ Interest expense $90,000 $90,000 Times interest earned
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Chapter14Solution - Excel Templates Chapter 14 Student Name...

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