acc, Basic Statistics

Assignment Help:
Project I


The trial balance of the Parton Wholesale Company contained the following accounts at December 31, 2010 the end of the company’s calendar year.

PARTON WHOLESALE COMPANY
Trial Balance
31-Dec-10

Debit Credit
Cash $ 34,400
Accounts Receivable 36,600
Merchandise Inventory (Beginning) 62,400
Land 92,000
Buildings 197,000
Accumulated Depreciation-Buildings $ 54,000
Equipment 83,500
Accumulated Depreciation-Equipment 42,400
Notes Payable 50,000
Accounts Payable 37,500
Common Stock 200,000
Retained Earnings 67,800
Dividends 10,000
Sales 886,100
Sales Discounts 4,600
Purchases 725,100
Purchase Discounts 16,000
Freight-in 12,400
Salaries Expense 69,800
Utilities Expense 9,400
Repair Expense 5,900
Gas and Oil Expense 7,200
Insurance Expense 3,500
$ 1,353,800 $ 1,353,800




Adjustment data:
1. Depreciation is $10,000 on buildings and $9,000 on equipment. (Both are administrative expenses.)
2. Interest of $7,000 is unpaid on notes payable at December 31.

Other data:
1. Merchandise inventory on hand at December 31, 2010 is $90,000.
2. Salaries are 80% selling and 20% administrative.
3. Utilities expense, repair expense, and insurance expense are 100% administrative.
4. $15,000 of the notes payable are payable next year.
5. Gas and oil expense is a selling expense.
6. The beginning balance of accounts receivable is $34,750.
7. The amount of total assets at the beginning of the year is $469,225.

Instructions
1) Journalize the adjusting entries.

2) Prepare a multiple-step income statement and a retained earnings statement for the year ended, as well as a classified balance sheet as of December 31, 2010.

3) Prepare the following ratios and show all support for your computations:

a) Current Ratio
b) Quick Ratio
c) Working Capital
d) Accounts Receivable Turnover
e) Average Collection Period
f) Inventory Turnover
g) Days in Inventory
h) Debt to Total Assets Ratio
i) Gross Profit Ratio
j) Profit Margin Ratio
k) Return on Assets Ratio
l) Asset Turnover Ratio


4) Based on the ratios computed in 3) above, answer the following questions and use the financial statement ratios to support your answers where appropriate:

• Do you feel that the company is able to meet its current and long term obligations as they become due?

• Comment on the profitability of the company with respect to the various profitability ratios that you computed.

• Would you lend money to this company for the long term?

• Comment on the ability of the company to collect its receivables and mange inventory.



2007 2008 2009 Industry Average
Liquidity
Current 2.39 2.68 2.90 3.12
Quick 1.10 1.16 1.21 1.56
Working Capital $ 98,750.00 $ 100,450.00 $ 103,000.00 $ 110,000.00
Leverage
Debt to Total Assets (%) 20.97% 21.98% 22.89% 20.89%
Times Interest Earned 8.75 9.12 9.56 10.22
Activity
Inventory Turnover (sales) 8.21 9.91 10.12 10.52
Fixed Asset Turnover 3.43 3.51 3.59 3.64
Total Asset Turnover 2.15 2.20 2.25 2.56
Average Collection Period (days) 14.95 14.69 14.42 14.28
Accounts Receivable Turnover 24.08 24.50 24.97 25.21
Days in Inventory 44.46 36.83 36.07 43.21
Profitability
Gross Profit Margin (%) 21.10% 22.50% 24.03% 24.56%
Net Profit (%) 6.89% 7.25% 7.89% 8.03%
Return on Total Assets (%) 15.50% 16.10% 16.24% 16.07%
Return on Equity (%) 20.15% 21.89% 22.15% 22.06%
Payout Ratio (%) 15.10% 15.84% 16.09% 16.86%


Related Discussions:- acc

Statistical inference, A study was conducted at a major north-eastern Ameri...

A study was conducted at a major north-eastern American medical centre regarding blood cholesterol levels and heart-attack incidents. A total of 28 heart-attack patients had their

Find the pv of the depreciation tax, PC Shopping Network may upgrade its mo...

PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $115 million on equipment with a life of 5 years and a salvage value of $15 million. The

Hypotheses- sampling methodology or data collection design, Research Assign...

Research Assignment for Quantitative Methods 2 Purpose: To design, undertake and analyse research on a negotiated project, possible themes could be any one of the following:

Systematic sampling, Where an element of randomness is introduce by suing r...

Where an element of randomness is introduce by suing random numbers to pick up the unit with which to start this process of sampling is known as systematic sampling.

MANOVA, 5. Perform a factorial MANOVA on the data. Before interpreting the ...

5. Perform a factorial MANOVA on the data. Before interpreting the multivariate results of the MANOVA, check outcomes that test other assumptions for this statistic: equality of co

Probability, Suppose I ask you to pick any four cards at random from a deck...

Suppose I ask you to pick any four cards at random from a deck of 52, without replacement, and bet you one dollar that at least one of the four is a face card (i.e., Jack, Queen, o

Stock control, Two components, A and B, are used as follows: normal usage -...

Two components, A and B, are used as follows: normal usage - 50 per week each minimum usage - 25 per week each maximum usage - 75 per week re-order quantity - A:300; B:500 re-order

Hitorigrams, difference between historigrams and histogram

difference between historigrams and histogram

Sketch the frequency resoponce, i) For a 3 term averagin filter, write a di...

i) For a 3 term averagin filter, write a difference eqatuon governing the filter and dervie the corresponding z transform Sketch a pole zero plot, would this filter be stable, why

Regression analysis, Regression line drawn as y=c+1075x, when x was 2, and ...

Regression line drawn as y=c+1075x, when x was 2, and y was 239, given that y intercept was 11. Caculate the residual

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd