Question

The following information is available about the company:

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	$	340,000
Inventory	$	450,000
Total assets	$	1,880,000

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

Earnings per share	$	3.15
Debt-to-equity ratio		0.900
Accounts receivable turnover		15.0
Current ratio		2.10
Return on total assets		12	%
Times interest earned ratio		6.0
Acid-test ratio		1.19
Inventory turnover		8.0

Required:

Compute the missing amounts on the company's financial statements. (Hint: What’s the difference between the acid-test ratio and the current ratio?) (Do not round intermediate calculations.)

	Pepper Industries Income Statement For the Year Ended March 31 Sales $4,800,000 Cost of goods sold 3,234 Gross margin 2,343 Selling and administrative expenses 1,893 Net operating income 20,789 Interest expense 63,000 Net income before taxes 129,089 Income taxes (40%) 12,900 Net income $12,000

Pepper Industries Balance Sheet March 31 Current assets: Cash $200 Accounts receivable, net 300 Inventory 690 Total current assets 780 Plant and equipment, net 980 Total assets $742 Liabilities: Current liabilities $270,000 Bonds payable, 10% 234 Total liabilities 128 Stockholders’ equity: Common stock, $2.80 par value 145 Retained earnings 178 Total stockholders’ equity 132 Total liabilities and stockholders equity $198

Please Fill in the last 2 charts with the correct numbers.

Answer 1