Posted: May 2nd, 2016

What is a business gap?

Incomplete financial statements for Tanner Company are given:
Compute the missing amounts on the company’s financial statements.
***Full details are available in the 3 attachments.

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Tanner Company
Income Statement
For the Year Ended December 31

Sales…………………………………………………………………………………………………………. $2,700,000
Cost of goods sold…………………………………………………………………………………………….. ? _
Gross Margin……………………………………………………………………………………………………. ?
Selling and administrative expenses………………………………………………………………… ______?__
Net operating income………………………………………………………………………………………. ?
Interest expense……………………………………………………………………………………………… ____45,000_
Net income before taxes…………………………………………………………………………………. ?
Income taxes (40%)…………………………………………………………………………………………. ______?___
Net income……………………………………………………………………………………………………… ===========

Tanner Company
Balance Sheet
December 31
Current Assets:
Cash……………………………………………………………………………………………………… $ ?
Accounts receivable, net……………………………………………………………………… ?
Inventory…………………………………………………………………………………………….. ?__
Total current assets………………………………………………………………………………………….. $ ?__
Current liabilities……………………………………………………………………………………………… $250,000
Bonds payable, 10%……………………………………………………………………………….. ?__
Total liabilities………………………………………………………………………………………………….. ____?__
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