Lundberg Corporation's most recent balance sheet and incomestatement appear below:
Statement of Financial Position
December 31, Year 2 and Year 1
(in thousands of dollars) Year 2 Year 1 Asset: Current assets: Cash $ 160 $ 170 Accounts receivable 270 280 Inventory 170 160 Prepaid expenses 25 25 Total current assets 625 635 Plant and equipment, net 954 934 Total assets $ 1,579 $ 1,569 Liabilities and stockholders' equity: Current liabilities: Accounts payable $ 220 $ 210 Accrued liabilities 110 110 Notes payable, short term 160 170 Total current liabilities 490 490 Bonds payable 250 300 Total liabilities 740 790 Stockholders' equity: Preferred stock, $100 par value, 10% 260 260 Common stock, $1 par value 100 100 Additional paid-in capital--common stock 110 110 Retained earnings 369 295 Total stockholders' equity 839 765 Total liabilities and stockholders' equity $ 1,579 $ 1,555
Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars) Sales (all on account) $ 1,480 Costof goods sold 868 Gross margin 612 Selling and administrative expenses 334 Netoperating income 278 Interest expense 49 Netincome before taxes 229 Income taxes (30%) 69 Netincome $ 160
Dividends on common stock during Year 2 totaled $60 thousand.The market price of common stock at the end of Year 2 was $9.32 pershare.
k. Compute theacid-test ratio for Year 2.(Round your answer to 1 decimalplace.)
Acid-test ratio
l. Compute theaccounts receivable turnover for Year 2. (Round your answerto 2 decimal places.)
Accounts receivable turnover
m. Compute the average collection period for Year 2. (Use365 days in a year. Do not round intermediatecalculations. Round your answer to one decimalplace.)
Average collection period days
n. Compute the inventory turnover for Year 2. (Round youranswer to 2 decimal places. Omit the "$" sign in yourresponse.)
Inventory turnover $
o. Compute the average sale period for Year 2. (Use 365days in a year. Do not round intermediate calculations. Round youranswer to 1 decimal place.)
Average sale period days
p. Compute the times interest earned for Year 2. (Roundyour answer to 2 decimal places.)
Times interest earned
q. Compute the debt-to-equity ratio for Year 2. (Round youranswer to 2 decimal places.)
Debt-to-equity ratio
Lundberg Corporation's most recent balance sheet and incomestatement appear below:
| Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) | ||||
| Year 2 | Year 1 | |||
| Asset: | ||||
| Current assets: | ||||
| Cash | $ | 160 | $ | 170 |
| Accounts receivable | 270 | 280 | ||
| Inventory | 170 | 160 | ||
| Prepaid expenses | 25 | 25 | ||
| Total current assets | 625 | 635 | ||
| Plant and equipment, net | 954 | 934 | ||
| Total assets | $ | 1,579 | $ | 1,569 |
| Liabilities and stockholders' equity: | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 220 | $ | 210 |
| Accrued liabilities | 110 | 110 | ||
| Notes payable, short term | 160 | 170 | ||
| Total current liabilities | 490 | 490 | ||
| Bonds payable | 250 | 300 | ||
| Total liabilities | 740 | 790 | ||
| Stockholders' equity: | ||||
| Preferred stock, $100 par value, 10% | 260 | 260 | ||
| Common stock, $1 par value | 100 | 100 | ||
| Additional paid-in capital--common stock | 110 | 110 | ||
| Retained earnings | 369 | 295 | ||
| Total stockholders' equity | 839 | 765 | ||
| Total liabilities and stockholders' equity | $ | 1,579 | $ | 1,555 |
| Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) | |||
| Sales (all on account) | $ | 1,480 | |
| Costof goods sold | 868 | ||
| Gross margin | 612 | ||
| Selling and administrative expenses | 334 | ||
| Netoperating income | 278 | ||
| Interest expense | 49 | ||
| Netincome before taxes | 229 | ||
| Income taxes (30%) | 69 | ||
| Netincome | $ | 160 | |
Dividends on common stock during Year 2 totaled $60 thousand.The market price of common stock at the end of Year 2 was $9.32 pershare. |
| k. | Compute theacid-test ratio for Year 2.(Round your answer to 1 decimalplace.) |
| Acid-test ratio |
| l. | Compute theaccounts receivable turnover for Year 2. (Round your answerto 2 decimal places.) |
| Accounts receivable turnover |
| m. | Compute the average collection period for Year 2. (Use365 days in a year. Do not round intermediatecalculations. Round your answer to one decimalplace.) |
| Average collection period | days |
| n. | Compute the inventory turnover for Year 2. (Round youranswer to 2 decimal places. Omit the "$" sign in yourresponse.) |
| Inventory turnover | $ |
| o. | Compute the average sale period for Year 2. (Use 365days in a year. Do not round intermediate calculations. Round youranswer to 1 decimal place.) |
| Average sale period | days |
| p. | Compute the times interest earned for Year 2. (Roundyour answer to 2 decimal places.) |
| Times interest earned |
| q. | Compute the debt-to-equity ratio for Year 2. (Round youranswer to 2 decimal places.) |
| Debt-to-equity ratio |
Related questions
Lundberg Corporation's most recent balance sheet and incomestatement appear below:
| Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) | ||||
| Year 2 | Year 1 | |||
| Asset: | ||||
| Current assets: | ||||
| Cash | $ | 160 | $ | 170 |
| Accounts receivable | 270 | 280 | ||
| Inventory | 170 | 160 | ||
| Prepaid expenses | 25 | 25 | ||
| Total current assets | 625 | 635 | ||
| Plant and equipment, net | 954 | 934 | ||
| Total assets | $ | 1,579 | $ | 1,569 |
| Liabilities and stockholders' equity: | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 220 | $ | 210 |
| Accrued liabilities | 110 | 110 | ||
| Notes payable, short term | 160 | 170 | ||
| Total current liabilities | 490 | 490 | ||
| Bonds payable | 250 | 300 | ||
| Total liabilities | 740 | 790 | ||
| Stockholders' equity: | ||||
| Preferred stock, $100 par value, 10% | 260 | 260 | ||
| Common stock, $1 par value | 100 | 100 | ||
| Additional paid-in capital--common stock | 110 | 110 | ||
| Retained earnings | 369 | 295 | ||
| Total stockholders' equity | 839 | 765 | ||
| Total liabilities and stockholders' equity | $ | 1,579 | $ | 1,555 |
| Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) | |||
| Sales (all on account) | $ | 1,480 | |
| Costof goods sold | 868 | ||
| Gross margin | 612 | ||
| Selling and administrative expenses | 334 | ||
| Netoperating income | 278 | ||
| Interest expense | 49 | ||
| Netincome before taxes | 229 | ||
| Income taxes (30%) | 69 | ||
| Netincome | $ | 160 | |
Dividends on common stock during Year 2 totaled $60 thousand.The market price of common stock at the end of Year 2 was $9.32 pershare. |
| o. | Compute the average sale period for Year 2. (Use 365days in a year. Do not round intermediate calculations. Round youranswer to 1 decimal place.) |
| Average sale period | days |
| p. | Compute the times interest earned for Year 2. (Roundyour answer to 2 decimal places.) |
| Times interest earned |
| q. | Compute the debt-to-equity ratio for Year 2. (Round youranswer to 2 decimal places.) |
| Debt-to-equity ratio |
Lundberg Corporation's most recent balance sheet and incomestatement appear below:
| Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) | ||||
| Year 2 | Year 1 | |||
| Asset: | ||||
| Current assets: | ||||
| Cash | $ | 160 | $ | 170 |
| Accounts receivable | 270 | 280 | ||
| Inventory | 170 | 160 | ||
| Prepaid expenses | 25 | 25 | ||
| Total current assets | 625 | 635 | ||
| Plant and equipment, net | 954 | 934 | ||
| Total assets | $ | 1,579 | $ | 1,569 |
| Liabilities and stockholders' equity: | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 220 | $ | 210 |
| Accrued liabilities | 110 | 110 | ||
| Notes payable, short term | 160 | 170 | ||
| Total current liabilities | 490 | 490 | ||
| Bonds payable | 250 | 300 | ||
| Total liabilities | 740 | 790 | ||
| Stockholders' equity: | ||||
| Preferred stock, $100 par value, 10% | 260 | 260 | ||
| Common stock, $1 par value | 100 | 100 | ||
| Additional paid-in capital--common stock | 110 | 110 | ||
| Retained earnings | 369 | 295 | ||
| Total stockholders' equity | 839 | 765 | ||
| Total liabilities and stockholders' equity | $ | 1,579 | $ | 1,555 |
| Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) | |||
| Sales (all on account) | $ | 1,480 | |
| Costof goods sold | 868 | ||
| Gross margin | 612 | ||
| Selling and administrative expenses | 334 | ||
| Netoperating income | 278 | ||
| Interest expense | 49 | ||
| Netincome before taxes | 229 | ||
| Income taxes (30%) | 69 | ||
| Netincome | $ | 160 | |
| Dividends on common stock during Year 2 totaled $60 thousand.The market price of common stock at the end of Year 2 was $9.32 pershare.
|
