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Bennis Company: compute balance sheet ratios using attached balance sheet for 2009

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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Please find the solutions attached.

(a) Current

Current ...

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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