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The following information is available for Pepper Industries. All sales during the year were on account.




The following information is available for Pepper Industries.





a.

All sales during the year were on account.



b.

There was no change in the number of shares of common stock outstanding during the year.



c.


The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change during the year.



d.

Selected balances at the beginning of the current year were:








Accounts receivable

$270,000



Inventory

$622,300



Total assets

$4,485,000



e.

Selected financial ratios computed from the statements for the current year are:










Earnings per share

$2.63



Debt-to-equity ratio

0.7845



Accounts receivable turnover

15.00



Current ratio

2.90



Return on total assets

12 %



Times interest earned ratio

8.40



Acid-test ratio

2.20



Inventory turnover

5.70



Required:




1. Compute the missing amounts on the company's financial statements. (Round average number of common shares outstanding to nearest thousand, Debt-to equity ratio to 3 decimal places, Total stockholders' equity to nearest thousand and your final answers to the nearest whole dollar amount. Omit the "$" sign in your response.)




Pepper Industries


Income Statement
For the Year Ended March 31



Sales

$4,500,000



Cost of goods sold






Gross margin





Selling and administrative expenses






Net operating income





Interest expense


69,000



Net income before taxes





Income taxes (30%)





Net income


$




--------------------------------------------------------------------------------



2.

Pepper Industries
Balance Sheet
March 31



Current assets:





Cash

$



Accounts receivable, net





Inventory






Total current assets





Plant and equipment





Total assets


$



Liabilities:





Current liabilities

$311,000



Bonds payable, 10%





Total liabilities






Stockholders' equity:





Common stock, $5 par value





Retained earnings






Total stockholders' equity





Total liabilities and equity


$



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Top Answer

Dear Student Please find... View the full answer

Accounting-8093306.doc

Answer
Accounts receivables turnover=Net credit sales/ Average receivables
15=4,500,000/Average receivables
Average receivables=300,000
Average receivables=Opening receivables + Closing...

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