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    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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    https://brainmass.com/business/financial-statements/bennis-company-compute-balance-sheet-ratios-using-attached-balance-sheet-for-2009-177894

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    (a) Current

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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.

    $2.19

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