Use the Financial Data Shown Below to Calculate the Following

question 31

Essay

Use the financial data shown below to calculate the following ratios for the current year:
(a)Current ratio.
(b)Acid-test ratio.
(c)Accounts receivable turnover.
(d)Days' sales uncollected.
(e)Inventory turnover.
(f)Days' sales in inventory.
$$\begin{array}{l}\begin{array} { | l | r | r | } \hline\text { Income statement data }\\\hline \text { Sales } & \$ 650,000 & \\\hline \text { Cost of goods sold } & 425,000 & \\\hline \text { Income before taxes } & 78,000 & \\\hline \text { Net income } & 54,600 & \\\hline & & \\\hline & \text { Ending } & \begin{array} { c } \text { Beginning } \\\text { Balances }\end{array} \\\hline \text { Cash } & \$ 19,500 & \$ 15,000 \\\hline \text { Accounts receivable (net) } & 65,000 & 60,000 \\\hline \text { Inventory } & 71,500 & 64,500 \\\hline \text { Plant and equipment (net) } & \underline { 195,000 } & \underline { 183,900 } \\\hline \text { Total assets } & \$ 351,000 & \$ 323,400 \\\hline & & \\\hline \text { Current liabilities } & \$ 62,400 & \$ 52,700 \\\hline \text { Long-term notes payable } & 97,500 & 100,000 \\\hline\end{array}\end{array}$$

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Definitions:

Bulimia

An eating disorder marked by cycles of binge eating followed by behaviors such as vomiting or excessive exercise to prevent weight gain.

Meticulously

In a manner that shows great attention to detail; very thoroughly and precisely.

Bulimia Nervosa

An eating disorder marked by periods of binge eating followed by inappropriate compensatory behaviors such as vomiting, fasting, or excessive exercise to prevent weight gain.

Binge Ate

The act of eating large quantities of food in a short period of time, often associated with a lack of control over eating.