Posted: August 14th, 2016

What is the new order of business?

Stockholders’ equity:
Common stock, $2.50 par value…………………………………………………………. ?
Retained earnings……………………………………………………………………………… ___?___
Total stockholders’ equity……………………………………………………………………………… ___?___
Total liabilities and stockholders’ equity……………………………………………………….. $ ?
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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

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