In: Accounting
Reynolds Corporation's comparative balance sheets are presented below.
Reynolds CORPORATION |
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Balance Sheets |
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December 31 |
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2018 |
2017 |
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Cash |
$ 10,000 |
$ 9,000 |
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Accounts receivable |
35,000 |
30,000 |
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Inventory |
25,500 |
20,000 |
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Land |
15,000 |
15,000 |
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Building |
90,000 |
90,000 |
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Accumulated depreciation |
(27,000) |
(25,000) |
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Total |
$148,500 |
$139,000 |
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Accounts payable |
$ 50,000 |
$ 45,000 |
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Common stock |
65,000 |
60,000 |
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Retained earnings |
33,500 |
34,000 |
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Total |
$148,500 |
$139,000 |
Reynolds' 2018 income statement included net credit sales of $200,000, cost of goods sold of $120,000, and net income of $30,000.
Instructions:
Compute the following ratios for 2018. (a) Current ratio.
(b) Acid-test ratio. (c) Receivables turnover. (d) Profit margin.
(e)Return on assets. (Round ratios to 2
decimal places and percentages to 1 decimal
place.)