Compute the current ratio and inventory turnover

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Reference no: EM131164172

Problem 1:

Plastics Inc. is a company that operates in four different divisions. The following information relating to each segment is available for 2013.


Sales revenue

Cost of goods sold

Operating expenses

Total expenses

Operating profit (loss)

Identifiable assets

Bottles

$ 65,000

$  26,000

$8,000

$ 34,000

$31,000

$ 66,000

Containers

$ 95,000

$ 62,000

$ 48,000

$ 110,000

$ (15,000)

$  80,000

Dollhouses

$ 620,000

$ 353,000

$140,000

$ 493,000

$ 127,000

$ 640,000

Silverware

$18,000

$  8,000

$ 6,500

$14,500

$3,500

$36,000

Sales of segments Containers and Dollhouses included intersegment sales of $30,000 and $150,000, respectively.

Required:

Determine which of the segments are reportable based on the following:

Revenue Test
Operating profit (loss) test
Identifiable assets test

Problem 2:

The following information pertains to Walrus Inc.

Cash

$60,000

Accounts receivable

170,000

Inventory

100,000

Plant assets (net)

582,000

Total assets

$912,000

Accounts payable

$110,000

Accrued taxes and expenses payable

42,000

Long-term debt

120,000

Common stock ($10 par)

260,000

Paid-in capital in excess of par

50,000

Retained earnings

330,000

Total equities

$912,000

Net sales (all on credit)

$2,000,000

Cost of goods sold

1,400,000

Net income

120,000

Required:

Compute the following:

(ignore Avg for balance sheet accounts)

(a) Current ratio
(b) Inventory turnover
(c) Receivables turnover
(d) Book value per share
(e) Earnings per share
(f) Debt to total assets
(g) Profit margin on sales
(h) Return on common stock equity.

Reference no: EM131164172

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