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Financial & Managerial Acct Terms 1 & 2- BV F09 / Problem 18-6A

P18-6A

The comparative statements of Dillon Company are presented below.

 DILLON COMPANY
 Income Statement
 

For the Year Ended December 31

  2009 2008
 Net sales (all on account)

$600,000

 

$520,000

 Expenses   
      Cost of goods sold415,000 354,000
      Selling and administrative120,800 114,800
      Interest expense7,800 6,000
      Income tax expense

18,000

 

14,000

           Total expenses

561,600

 

488,800

 Net income

$ 38,400

 

$ 31,200

     
 DILLON COMPANY
 Balance Sheets
 

December 31

 Assets2009 2008
 Current assets   
    Cash$ 21,000 $ 18,000
    Short-term investments18,000 15,000
    Accounts receivable (net)86,000 74,000
    Inventory

90,000

 

70,000

       Total current assets

215,000

 

177,000

 Plant assets (net)

423,000

 

383,000

 Total assets

$638,000

 

$560,000

     
 Liabilities and Stockholders' Equity   
 Current liabilities   
    Accounts payable$122,000 $110,000
    Income taxes payable

23,000

 

20,000

       Total current liabilities

145,000

 

130,000

 Long-term liabilities   
    Bonds payable

120,000

 

80,000

       Total liabilities

265,000

 

210,000

 Stockholders' equity   
    Common stock ($5 par)150,000 150,000
    Retained earnings

223,000

 

200,000

       Total stockholders' equity

373,000

 

350,000

 Total liabilities and stockholders' equity

$638,000

 

$560,000

Additional data:
The common stock recently sold at $19.50 per share.
The year-end balance in the allowance for doubtful accounts was $3,000 for 2009 and $2,400 for 2008.

Instructions

Compute the following ratios for 2009. (Round acid-test ratio and earnings per share to 2 decimal places and all other answers to 1 decimal place.)

(a)Current :1
(b)Acid-test :1
(c)Receivables turnover times
(d)Inventory turnover times
(e)Profit margin%
(f)Asset turnover times
(g)Return on assets%
(h)Return on common stockholders' equity%
(i)Earnings per share$
(j)Price-earnings times
(k)Payout%
(l)Debt to total assets%
(m)Times interest earned times

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