Home / Questions / 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.
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