Bennis Company: compute balance sheet ratios using attached balance sheet for 2009
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18-7) Please see the attachment for the problem and instructions.
Instructions:
Compute the following ratios at December 31, 2009.
(a) Current
(b) Acid-test
(c) Receivables turnover
(d) Inventory turnover
BENNIS COMPANY
Balance Sheets
December 31
2009 2008
Cash $15,000 $30,000
Receivables (net) 70,000 60,000
Inventories 60,000 50,000
Plant assets (net) 200,000 180,000
$345,000 $320,000
Accounts payable $50,000 $60,000
Mortgage payable (15%) 100,000 100,000
Common stock, $10 par 140,000 120,000
Retained earnings 55,000 40,000
$345,000 $320,000
Additional information for 2009:
1. Net income was $25,000
2. Sales on account were $410,000. Sales returns and allowances were $20,000.
3. Cost of goods sold was $198,000.
4. The allowance for doubtful accounts was $2,500 on December 31, 2009, and $2,000 on December 31, 2008.
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Solution Summary
Bennis Company ratios are computed in the attached Excel worksheet which includes the formulas for calculation as well as the solution.
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Please find the solutions attached.
(a) Current
Current ...
Education
- BA, Ain Shams University, Cairo Egypt
- MBA, California State University, Sacramento
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