Compute the Acid-test ratio at 12/31/13.Receivables turnover in 2013

Compute the Acid-test ratio at 12/31/13.Receivables turnover in 2013

Computation of selected ratios.

The following data is given:

December 31,

2013 2012

Cash $ 66,000 $ 50,000

Accounts receivable (net) 68,000 60,000

Inventories 90,000 110,000

Plant assets (net) 383,000 325,000

Accounts payable 57,000 40,000

Salaries and wages payable 10,000 5,000

Bonds payable 70,000 70,000

10% Preferred stock, $40 par 100,000 100,000

Common stock, $10 par 120,000 90,000

Paid-in capital 80,000 65,000

Retained earnings 170,000 175,000

Net credit sales 800,000

Cost of goods sold 600,000

Net income 80,000

Instructions

Compute the following ratios:

(a) Acid-test ratio at 12/31/13

(b) Receivables turnover in 2013

(c) Inventory turnover in 2013

(d) Profit margin on sales in 2013

(e) Rate of return on common stock equity in 2013


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