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Rees Corporation experienced a fire on December in which its financial records

Rees Corporation experienced a fire on December 31, 2009, in which its financial records were partially destroyed. It has beenable to salvage some of the records and has ascertained the following balances.

December 31,2009 December 31, 2008

Cash $ 30,000 $ 10,000

Receivables (net) 72,500126,000

Inventory 200,000 180,000

Accounts payable 50,00090,000

Notes payable 30,000 60,000

Common stock, $100 par 400,000400,000

Retained earnings 113,500101,000

Additional information:

1. The inventoryturnover is 3.5 times.

2. The return oncommon stockholders’ equity is 24%. The company had noadditional paid-in capital.

3. The receivables turn over is 8.8 times.

4. The return on assets is 20%.

5. Total assets at December 31, 2008, were $605,000.

734 Chapter 15Financial Statement Analysis

Computeselected ratios.

(SO 5)

Compute amounts from ratios.

(SO 5)

Instructions

Compute the following for Rees Corporation.

(a) Cost of goodssold for 2009.

(b) Net sales(credit) for 2009.

(c) Net incomefor 2009.

(d) Total assetsat December 31, 2009.

May 04 2018 Read more Less More

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