Balance sheet for the bryan corporation

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Reference no: EM13327258

Problem 1

The balance sheet for the Bryan Corporation is shown below. Sales for the year were $3,680,000, with 75 percent of sales sold on credit.

BRYAN CORPORATION
Balance Sheet 201X

Assets

Liabilities and Stockholders' Equity

  Cash

$

21,000   

    Accounts payable

$

222,000   

  Accounts receivable

 

324,000   

    Accrued taxes

 

93,000   

  Inventory

 

244,000   

    Bonds payable (long-term)

 

194,000   

  Plant and equipment

 

461,000   

    Common stock

 

100,000   

 

 

 

 

 

 

 

 

 

    Paid-in capital

 

150,000   

 

 

 

    Retained earnings

 

291,000   

 



 



      Total assets

$

1,050,000   

       Total liabilities and
           stockholders' equity

$

1,050,000   

 





 






Compute the following ratios

(a) Current ratio

(b) Quick ratio

(c) Debt-to-total-assets ratio

(d) Asset turnover

(e) Average collection period days

Problem 2

Using the income statement for J. Lo Wedding Gowns, compute the following ratios:

J. LO WEDDING GOWNS
Income Statement

  Sales

$

281,000  

     Less: Cost of goods sold

 

169,000  

 



  Gross profit

 

112,000  

     Less: Selling and administrative expense

 

44,800  

     Less: Lease expense

 

17,500  

 



  Operating profit*

$

49,700  

     Less: Interest expense

 

8,100  

 



  Earnings before taxes

$

41,600  

     Less: Taxes (30%)

 

16,640  

 



  Earnings after taxes

$

24,960  

 





  *Equals income before interest and taxes.

 

 


(a) Compute the interest coverage ratio.

(b) Compute the fixed charge coverage ratio.

(c) The total assets for this company equal $211,000. Compute the return on assets (investment). 

Reference no: EM13327258

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