F7_T5 - F7 T5 r""5 |:| Marked 1'E v 9&6‘g1nuns v ‘3 Uptiflnsmv 0 Stent Cc had tetal assets at 5550.000 capital stuck at 5150.000

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Unformatted text preview: F7 T5 r" "5 |:| Marked 1 _,.'E v 9&6‘g1nuns v ‘3 Uptiflnsmv 0 Stent Cc. had tetal assets at 5550.000. capital stuck at 5150.000. and retained earnian df 5215.000. 1i-"ilhat was Stent's deht-td-equity raticl?I HOMEWORK F? : Financial Instruments, Steckhclders' Equity, and Cash Flows (... _ .r My ri. {Z} a. 2.53 {3} h. ma {2} c. 0.52 {2} d. 0.43 1 Chdice "h" is ccrrect. Tc: calculate Stent Cd's deht-th-equity raticu. Stent's tdtal liabilities and tdtal equity must he derived from the facts: Equity = I1.":apitalstdcl: + Retained earnings = 5150.000 + 215.000 = 5555.000 Liahilities = Assets - Equity = 5?|50.000 - 555.000 = 5505.000 Stent's deht-td-equity ratid is then calculated as: Tdtal liahilities _ 5555.000 — = 1.05 Equity 5555.000 Chdice "a" is inccurrect. The dendntinatdr dfthe deht-tcu-equity ratic: is tcutal equity. ndt just capital stock. See the calculatidn ahdye. Chdice "c" is inccurrect. The debt raticu. net the deht-td-equity raticu. is equal td liahilities divided by tdtal assets. Chdice "d" is inccurrect. The deht-tcu-equity ratic: is net equal td equity divided by tdtal assets. I'l PM S'l'lll Fi'lit'inn Irl.":..1‘l 1 PM HDMEWORK F? : Financial Instruments, Stockholders' Equity, and Cash Flows (... vau D Marked 2 egeg 3:“? y do TCR Enterprises provided the following information from its Statement offinancial position for the year ended December 31 Year1 January- 7- Decemoei' 37 Cash 510 flfli] 550 flfli] flccounts receivable 12l] flflfl 1'30 flfll] Inventories zoo flfli] 1GB flfli] F'repaid expenses 2i] flfli] 1i] flfli] ficcounts payable 1?:5 EIEIIII 12D IIIIIIEI ficcrued liabilities 25 [Ni] 3i] flfli] TCRs sales and cost of sales forYear 1 were 51-400 [Ni] and 584i] flfli] respectively 'v"-.-‘hat is the accounts receivable turnover in days”? [120 [Mi] +1i]i] flflfl] leverage islet Receivables = g R Turnover in Days = Net Credit es.-"3|35 S14flflflflfl.-"3|35 Choice "a" is incorrect This answer incorrectly uses the December 31 Year 1 accounts receivable balance of 51m] flfli] rather than the average accounts FECE 51 1t] flfli] Choice "c" is incorrect This answer incorrectly uses the January 1 Year1 accounts receivable balance of512i] flfli] ratherthan the average accounts receival 51 1t] flfli] Choice "d" is incorrect This answer incorrectly uses the December 31 Year 1 inventory balance of S160 flfli] ratherthan the average accounts receivable bala S'I'I11 Frlitirtn i'-..-=..1‘I HOMEWORK F? : Financial Instruments, Steckhelders' Equity, and Cash Flevvs (... “ku a 7 avg cg up is: 30.22:: The centreller ef F'eabedv. Inc. has been asked te present an analysis ef acceunts receivable cellectiens at the upceming staff meeting. The fellevving inferr 1331'. Yeah? 12.331. ‘r’earf Acceunts receivable 5100.000 5130.000 Allevrance. deubtful acceunts [20.000] [40000] Sales 400.000 200.000 Cest ef geeds seld 350.000 T0000 1What is the receivables turnever ratie as ef December 31. vearE'?I C} a. se 1 {E} b. 4.? I C} c. 3.5 C} d. as Cheice "b" is cerrect. Te calculate ARturnever. average net receivables must first be calculated: Average net receivables = [[5100000 - 520000] + [5130.000 - S40.000]].-"2 = 505.000 Acceunts receivable turnever is then calculated as: AR Turnever = Net credit sales .H'Average net receivables = 400000 .E' 05.000 = 4.? 3 Cheice "a" is incerrect. ARturnever is calculated using average net receivables. net 123'31vear 2 net receivables. Whenever a ratie cembines balance sheet a items. the average efthe balance sheet item sheuld be used. Cheice "c" is incerrect. ARturnever sheuld be calculated using net receivables. net gress receivables. Cheice "d" is incerrect. This ansvver is net reasenable given the facts and the AR turnever fermula. 3 PM S'l'lll Fi'lil'inn Irl.":..1‘I HDMEWORK F? : Financial Instruments, Stockholders' Equity, and Cash Flows (... vau 4 E T 9% @% my. . 3? figs DUKE, lull; The following information was taken from Elaxter Department Store's financial statements: Inventory at January 1 5100.000 Inventory at December 31 300.000 Net sales 2.000.000 Net purchases ?00.000 1i-"v'hat was Baxter's inventory turnover for the year ending December 31? {E} a. 2.5 v C} h. 3.5 . {3' c. 5 {Z} d. 1o Choice "a" is correct. To calculate inventoryturnover. cost of goods sold must first he calculated: Beginning inventory 5 100.000 + Purchases + F00.000 Goods available for sale 5 000.000 l - Ending inventory - 300.000 3 Cost ofgoods sold 5 sooooo Inventory turnover is then calculated as follows: Cost of goods sold 8500 2 5 Inventory turnover = — — Average inventory [5100 — 5300:! 2 3 PM S'l'lll Fi'lil'inn fl.":..1fl HOMEWORK F? : Financial Instruments, Stockholders' Equity, and Cash Flows (... I-vau 5 .96 v @%©%1UD% * w 0 The following financial ratios and calculations were based on information from Kohl Co's financial statements forthe current year: Assoo‘rifs receivable turnover Ten times during the year Total assets turnover Two times during the year Average receivables during fhe year EEUUDUU 1What was Kohl's average total assets for the year?I C} a. seoooooo {E} h. $1.UUU.UUU C} o. s4oo.ooo C} d. seooooo Choioe "h" is correct. Ely formula: Net sales 5 Total asset turnayer = — Average total assets 3 fiVETflgEtutal assets = fl Total asset tLIrnoyer 1,ooo,oon = :1 PM S'l'lll Frlil'inn quJW HOMEWORK F? : Financial Instruments, Stockholders' Equity, and Cash Flows (... vau _ .r .3.) a E v 9% 6%10'3'3’" * w Kline to had the follovving sales and accounts receivable balances at the end ofthe current year: Cash sales 51.000000 Net credit sales 3.000.000 Net accounts receivahle. 1.-"1 100.000 Net accounts receivable. 12.!"31 400.000 1What is Kline's average collection period for its accounts receivable?I C} a. 48.0 days. i G} h. sop days. . C} c. 22.5 days. {2} d. 12.0 days. Choice "h" is correct. To compute the average collection period. we must first calculate accounts receivable turnover. Net credit sales fiverage accts. rec. 3000000 [100000 + 400.000]+ 2 3 12 Accts. rec. turnover = 305 Facets. re c. turnover 305 F 30 3 Average collection period '3. PM S'l'lll Frlil'inn Irl.":..1‘l ...
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This note was uploaded on 05/31/2011 for the course ACCT 593 taught by Professor Karylfriedman during the Spring '11 term at Keller Graduate School of Management.

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