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Home / Questions / PROBLEM 15 19 Incomplete Statements; Analysis of Ratios LO2 LO3 LO4 Incomplete financial s...

PROBLEM 15 19 Incomplete Statements; Analysis of Ratios LO2 LO3 LO4 Incomplete financial statements for Tanner Company are given below The following additional

PROBLEM 15–19 Incomplete Statements; Analysis of Ratios [LO2, LO3, LO4]

Incomplete financial statements for Tanner Company are given below:

 

 

 

 

 

 

 

 

The following additional 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

Debt-to-equity ratio . . . . . . . . . . . . . .

0.875

Times interest earned . . . . . . . . . . . .

7.0

Earnings per share . . . . . . . . . . . . . .

$4.05

Return on total assets . . . . . . . . . . . .

14%

 

b.       All sales during the year were on account.

c.        The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change throughout the year.

d.       There were no changes in the number of shares of common stock outstanding during the year.

e.        Selected balances at the beginning of the current year (January 1) were as follows:

 

Accounts receivable . . . .

$160,000

Inventory . . . . . . . . . . . . .

$280,000

Total assets . . . . . . . . . . .

$1,200,000

 

Required:

Compute the missing amounts on the company’s financial statements. (Hint: You may find it help- ful to think about the difference between the current ratio and the acid-test ratio.)

Jun 27 2020 View more View Less

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