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Tanner Company: Compute the Missing Amounts

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.

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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................................................................. $ ?
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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

Attachments

Solution Summary

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

$2.19