Whittaker, Inc: Prepare income statement, balance sheet and financial ratios
Not what you're looking for?
See attached file.
Complete an Income Statement and Balance Sheet using Financial Ratio Data. Use basic ratio calculations to determine the proper metrics within a balance sheet (see attached)
Analytical Case - Complete an Income Statement and Balance Sheet Using Financial Ratio Data. Use basic ratio calculations to determine the proper metrics within a balance sheet.
Whittaker, Inc.
Income Statement
For the Year Ended December 31, 2011
Sales $?
Cost of goods sold $?
Gross profit $?
Operating expenses $?
Income from operations $?
Interest expense $?
Income before taxes $?
Income taxes (20%0 $?
Net income $?
Whittaker, Inc.
Balance Sheet
For the Year Ended December 31, 2011
Current assets:
Cash $?
Accounts receivable, net $?
Inventory $?
Total current assets $171,000
Property, plant, and equipment, net $?
Total assets $?
Current liabilities $?
Bonds payable, 15% $70,000
Total Liabilities $?
Owner's equity:
Common stock, $2 par value $10,000
Additional paid-in capital $15,000
Retained earnings $?
Total owner's equity $?
Total liabilities and owner's equity $?
Additional information:
Financial ratio computed from these financial statements include the following:
Current ratio 1.9 to 1
Acid-test ratio 1.3 to 1
Debt/equity ratio 2.0 to 1
Inventory turnover 4.0 times
Accounts receivable turnover 6.8 times
Times interest earned 4.45 times
Gross profit ratio 40%
Return on investment 12%
Earnings per share $5.52
1. All sales during the year were made on account, Cash collections during the year exceeded sales by $14,000, and no uncollectable accounts were written off.
2. The balance of the accounts receivable account was $57,000 on January 1, 2011
3. No common stock was issued during the year.
4. Dividends declared and paid during the year were $7,600
5. The balance of the inventory account was $48,000 on January 1, 2011
6. Interest expense on the income statement relates to the 15% bonds payable; $10,000 of these bonds were issued on May 1, 2011; the remaining amount of
bonds payable were outstanding throughout the year. All bonds were issued at face amount.
REQUIRED:
a. Complete the income statement and balance sheet for Whittaker, Inc. Show how each amount was determined.
b. After completing part a, use your answers to recompute each of the financial ratios provided as additional information.
Purchase this Solution
Solution Summary
This solution helps prepare an income statement, balance sheet and financial ratios.
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
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.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Operations Management
This quiz tests a student's knowledge about Operations Management
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking