Thursday, 2 August 2012

The following information is available about the company:

Problem 15-19 Incomplete Statements; Analysis of Ratios [LO2, LO3, LO4]
The following information is available about the company:

a. Selected financial ratios computed from the statements above are given below:

  Current ratio 2.40
  Acid-test ratio 1.12
  Accounts receivable turnover 15.0
  Inventory turnover 6.0
  Debt-to-equity ratio 0.875
  Times interest earned 7.0
  Earnings per share $ 4.05
  Return on total assets 14 %


b. All sales during the year were on account.
c. The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change throughout the year.
d. There were no changes in the number of shares of common stock outstanding during the year.

e. Selected balances at the beginning of the current year (January 1) were as follows:

  Accounts receivable $ 160,000 
  Inventory $ 280,000 
  Total assets $ 1,200,000 


Required:
Compute the missing amounts on the company's financial statements. (Input all amounts as positive values. Round your final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Tanner Company
Income Statement
For the Year Ended December 31
  Sales $2,700,000   
  Cost of goods sold  

  Gross margin  
  Selling and administrative expenses  

  Net operating income  
  Interest expense 45,000   

  Net income before taxes  
  Income taxes (40%)  

  Net income $  




Tanner Company
Balance Sheet
December 31
  Current assets:
        Cash $  
        Accounts receivable, net  
        Inventory  

  Total current assets  
  Plant and equipment, net  

  Total assets $  


       Current liabilities $250,000   
       Bonds payable, 10%  

  Total liabilities  

  Stockholders' equity:
       Common stock, $2.50 par value  
       Retained earnings  

  Total stockholders' equity  

  Total liabilities and stockholders’ equity $  





Explanation: