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Calculate amount of the operating income

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Reference no: EM132826414

You are requested to reconstruct the accounts of Essential Enterprises for analysis. The following data for 2019 were made available to you:

  1. Gross margin amounted to P472,500.
  2. Ending balance of merchandise inventory was P300,000.
  3. Long-term liabilities consisted of bonds payable with interest rate of 20%
  4. Total shareholders' equity as of December 31, 2019 was P715,000

Ratios:

Gross margin ratio 35%
Debt-to-equity ratio 0.8 to 1
Times interest earned 10
Quick (Acid-test) ratio 1.3
Ratio of operating expenses to sales 18%

Required:

Problem 1: Calculate the:

1. Amount of the operating income for 2019
2. Amount of the bonds payable
3. Amount of total current liabilities
4. Amount of total current assets

Reference no: EM132826414

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