Megaframe Computer Company - Balance Sheet
Not what you're looking for?
Use the following information to answer the next eight questions:
MEGAFRAME COMPUTER COMPANY
Balance Sheet
As of December 31, 2006
ASSETS
Cash $ 40,000
Accounts Receivable 60,000
Inventory 90,000
New Plant and Equipment 220,000
Total Assets $410,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable $ 60,000
Accrued Expenses 40,000
Long-Term debt 130,000
Common Stock 60,000
Paid-In capital 20,000
Retained earnings 100,000
Total Liabilities and Stockholders' Equity $410,000
MEGAFRAME COMPUTER COMPANY
Income Statement
For the Year Ended December 31, 2006
Sales (all on credit) $720,000
Cost of Goods Sold 500,000
Gross Profit 220,000
Sales and Administrative Expense 20,000
Depreciation 40,000
Operating Profit 160,000
Interest Expense 16,000
Profit before Taxes 144,000
Taxes (30%) 43,200
Net Income $100,800
The firm's return on equity is
52.8%
55.6%
56.0%
100.0%
The firm's average collection period is
30 days.
25 days.
14.4 days.
20 days.
The firm's receivable turnover is
4.4x
10x
12x
14.4x
Megaframe's quick ratio is
2
1
1.6
10
Megaframe's current ratio is
1.9
1.625
1.5
3.2
What is Megaframe Computer's total asset turnover?
4.50x
3.6x
2x
1.76x
The firm's debt to asset ratio is
56.1%
47.22%
33.33%
none of the above
Times interest earned for Megaframe Computer is
4.5x
9x
11x
10x
Purchase this Solution
Solution Summary
This solution is comprised of a detailed explanation to calculate, the firm's return on equity, the firm's average collection period, the firm's receivable turnover, quick ratio, current ratio, total asset turnover, debt to asset ratio, and times interest earned.
Solution Preview
Use the following information to answer the next eight questions:
MEGAFRAME COMPUTER COMPANY
Balance Sheet
As of December 31, 2006
ASSETS
Cash $ 40,000
Accounts Receivable 60,000
Inventory 90,000
New Plant and Equipment 220,000
Total Assets $410,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable $ 60,000
Accrued Expenses 40,000
Long-Term debt 130,000
Common Stock 60,000
Paid-In capital 20,000
Retained earnings 100,000
Total Liabilities and Stockholders' Equity $410,000
MEGAFRAME COMPUTER COMPANY
Income Statement
For the Year Ended December 31, ...
Purchase this Solution
Free BrainMass Quizzes
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Basics of corporate finance
These questions will test you on your knowledge of finance.