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    Tanner Company: Compute the Missing Amounts

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    Incomplete financial statements for Tanner Company are given:
    Compute the missing amounts on the company's financial statements.
    ***Full details are available in the 3 attachments.

    ---------------------------------

    Tanner Company
    Income Statement
    For the Year Ended December 31

    Sales......................................................................................................................... $2,700,000
    Cost of goods sold........................................................................................................... ? _
    Gross Margin................................................................................................................... ?
    Selling and administrative expenses........................................................................... ______?__
    Net operating income.................................................................................................... ?
    Interest expense............................................................................................................ ____45,000_
    Net income before taxes.............................................................................................. ?
    Income taxes (40%)....................................................................................................... ______?___
    Net income..................................................................................................................... ===========

    Tanner Company
    Balance Sheet
    December 31
    Current Assets:
    Cash..................................................................................................................... $ ?
    Accounts receivable, net................................................................................. ?
    Inventory........................................................................................................... ?__
    Total current assets........................................................................................................ $ ?__
    Current liabilities............................................................................................................ $250,000
    Bonds payable, 10%............................................................................................ ?__
    Total liabilities................................................................................................................. ____?__
    Stockholders' equity:
    Common stock, $2.50 par value................................................................... ?
    Retained earnings.......................................................................................... ___?___
    Total stockholders' equity.......................................................................................... ___?___
    Total liabilities and stockholders' equity................................................................. $ ?
    ========

    The following 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

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    https://brainmass.com/business/finance/tanner-company-compute-the-missing-amounts-534728

    Attachments

    Solution Summary

    Your spreadsheet work is attached. Click in cells to see computations.

    $2.19