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Trevor’s furniture company accounts’ information for 2019 is as follows: near-cash is $500, the amount of...

Trevor’s furniture company accounts’ information for 2019 is as follows:

near-cash is $500, the amount of money that customers currently owe to the com-
pany for goods that were purchased on credit is $10,000, the amount of accounts

payable is $9,000. Products in inventory are worth $40,000, accumulated deprecia-
tion is 15% of total gross fixed assets. Lands, buildings and equipment were valued

$126,000. 5-Year Debt is $22,950, common stock is $26,000 and retained earnings
at the end of the year is $31,058. Gross profit is $64,000. Fixed cash operating
expenses, variable operating expenses and depreciation are $21,000, $16,000 and

$15,000 respectively. Interest expenses are $6,000 and the tax rate is 21%. Addi-
tionally, regarding stock, the paid in capital in excess of par is $0.75 per common

stock. The number of common stock is 74,000. On the other hand, the cost of
goods sold is half as much as sales. The preferred stock dividend rate is 2% for a
face-value stock value of $9,000. A short-term bank loan of $3,000 is going to be
paid o↵ next month. Finally, promised bonuses for employees (to be paid o↵ soon)
accrue $1,092.
(a) Construct the income statement for this company.
(b) Construct the balance-sheet statement for this company.
(c) Calculate the current ratio and ROE.

Solutions

Expert Solution

a) income statement

Computation of Sales, Cost of goods sold and pref dividend is shown below

b)    balance sheet

other workings for balance sheet

c) current ratio and ROE

jeff jeffy answered 1 year ago
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