In: Accounting
An incomplete income statement and an incomplete comparative
balance sheet of Deines Corporation are presented below.
Additional information:
1. | The accounts receivable turnover for 2017 is 10 times. | |
2. | All sales are on account. | |
3. | The profit margin for 2017 is 14.5%. | |
4. | Return on assets is 22% for 2017. | |
5. | The current ratio on December 31, 2017, is 3.0. | |
6. | The inventory turnover for 2017 is 4.8 times. |
Compute the missing information given the ratios above.
DEINES CORPORATION |
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Net sales | $12,870,000 | |
Cost of goods sold | ||
Gross profit | ||
Operating expenses | 1,948,050 | |
Income from operations | ||
Other expenses and losses | ||
Interest expense | ||
Income before income taxes | ||
Income tax expense | 655,200 | |
Net income | $ |
DEINES CORPORATION |
||||
Assets |
2017 |
2016 |
||
Current assets | ||||
Cash | $ 526,500 | $ 438,750 | ||
Accounts receivable (net) | 1,111,500 | |||
Inventory | 2,012,400 | |||
Total current assets | 3,562,650 | |||
Plant assets (net) | 5,405,400 | 4,627,350 | ||
Total assets | $ | $8,190,000 | ||
Liabilities and Stockholders’ Equity |
||||
Current liabilities | $ | $965,250 | ||
Long-term notes payable | 3,276,000 | |||
Total liabilities | 4,241,250 | |||
Common stock, $1 par | 3,510,000 | 3,510,000 | ||
Retained earnings | 468,000 | 438,750 | ||
Total stockholders’ equity | 3,978,000 | 3,948,750 | ||
Total liabilities and stockholders’ equity | $ | $8,190,000 |
DEINES CORPORATION | ||
Income Statement | ||
For the Year Ended December 31, 2017 | ||
Net sales | $12,870,000 | |
Cost of goods sold | $ 8,143,200 | =(1380600+2012400)/2*4.8 |
Gross profit | $ 4,726,800 | =12870000-8143200 |
Operating expenses | $ 1,948,050 | |
Income from operations | $ 2,778,750 | =4726800-1948050 |
Other expenses and losses | ||
Interest expense | $ 257,400 | =2778750-2521350 |
Income before income taxes | $ 2,521,350 | =1866150+655200 |
Income tax expense | $ 655,200 | |
Net income | $ 1,866,150 | =12870000*14.5% |
DEINES CORPORATION | |||
Balance Sheets | |||
Assets | 2017 | 2016 | |
Current assets | |||
Cash | $ 526,500 | $ 438,750 | |
Accounts receivable (net) | $ 1,462,500 | $ 1,111,500 | =12870000/10*2-1111500 |
Inventory | $ 1,380,600 | $ 2,012,400 | =3369600-526500-1462500 |
Total current assets | $ 3,369,600 | $ 3,562,650 | =8775000-5405400 |
Plant assets (net) | $ 5,405,400 | $ 4,627,350 | |
Total assets | $ 8,775,000 | $ 8,190,000 | =1866150/22%*2-8190000 |
Liabilities and Stockholders’ Equity | |||
Current liabilities | $ 1,123,200 | $ 965,250 | =3369600/3 |
Long-term notes payable | $ 3,673,800 | $ 3,276,000 | =4797000-1123200 |
Total liabilities | $ 4,797,000 | $ 4,241,250 | =8775000-3978000 |
Common stock, $1 par | $ 3,510,000 | $ 3,510,000 | |
Retained earnings | $ 468,000 | $ 438,750 | |
Total stockholders’ equity | $ 3,978,000 | $ 3,948,750 | |
Total liabilities and stockholders’ equity | $ 8,775,000 | $ 8,190,000 |