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Problem 13-11A Common-Size Statements and Financial Ratios for Creditors [LO1, LO3, LO4]
Modern Building Supply sells various building materials to retail outlets. The company has just approached Linden State Bank requesting a $300,000 loan to strengthen the Cash account and to pay certain pressing short-term obligations. The company's financial statements for the most recent two years follow:
During the past year, the company has expanded the number of lines that it carries in order to stimulate sales and increase profits. It has also moved aggressively to acquire new customers. Sales terms are 2/10, n/30. All sales are on account.
Linden State Bank is uncertain whether the loan should be made. To assist it in making a decision, you have been asked to compute the following amounts and ratios for both this year and last year:
Average collection period. (The accounts receivable at the beginning of last year totaled $241,000.)(Do not round intermediate calculations. Round your final answers to 1 decimal place. Use 365 days in a year.)
Present the balance sheet in common-size form. (Round your answers to 1 decimal place. Leave no cells blank - be certain to enter "0" wherever required. Due to rounding, figures may not fully reconcile down a column.)
Present the income statement in common-size form down through net income.(Input all amounts as positive values. Round your answers to 1 decimal place. Due to rounding, figures may not fully reconcile down a column.)
What is the definition of being self-employed? What distinguishes a self-employed individual from an employee? Why is this distinction important? Explain.
At the end of the current month 8,200 units were started but were not completed in the Mixing Department. The units were 90% complete with respect to material, but conversion was only 20% complete.
Lucia is a 69-year-old single individual who receives a taxable pension of $10,000 per year and Social Security benefits of $7,000. Lucia is considering the possibility of selling stock she has owned for years and using the funds to purchase a ..
Describe the cyclical nature of business activity. Make sure to discuss the operating and financing cycle.
which of the following is an advantage of corporations relative to partnerships and sole proprietorships?reduced legal
What is meant by the net realizable value for accounts receivable? What is aging of accounts receivable, and how is it used to account for uncollectible accounts? How is the accounts receivable turnover computed? What information does this ratio prov..
Woods sold all of the Holmes stock for $17 per share on December 3, 2011, incurring $14,000 in brokerage commissions. Woods Company should report a realized gain on the sale of stock in 2011 of ??
Joe has asked you to help him decide which of these potential contributions will be most advantageous tax-wise. Jay's taxable income is $3.5 million before considering the contribution. Rank the four alternatives and communicate your advice to Joe..
the account balances appearing on the trial balance were taken from the general ledger of flips copy shop at june 30
present value john longwaite will receive 100000 in 50 years. his friends are very jealous of him. if the funds are
The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools:
Charitable Contributions of Property. Blue Corporation donates the following property to Johnson Elementary School:
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