User Account

All Pages

Project, Basic Statistics

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

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

Instructions
Journalize the adjusting entries.

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.

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:- Project

State appropriate alternative hypotheses, A cognitive psychologists knows t...

A cognitive psychologists knows that concrete words, which easily evoke images (.e.g. "sunset", "truck") are easier to remember than abstract words, but she would like to know if t

Define vital statistics, Vital statistics may be interpreted in two ways-i...

Vital statistics may be interpreted in two ways-in a broader sense it refers to all types of population statistics by whatever mode collected while in a narrower sense it refers o

Current development project and presentation , review the financial disclos...

review the financial disclosures for two publicly traded companies. Identify recently promulgated (or proposed) accounting pronouncements that have an impact on the companies. In a

Graph, Difference between Historigrams and Histogram

Difference between Historigrams and Histogram

The linear regression, Print out your results and bring them with you to th...

Print out your results and bring them with you to the midterm as there will be additional questions on the midterm related to this analysis.  You must hand in your take-home by the

Calculate the weighted average cost of capital, The Foschini Group has just...

The Foschini Group has just issued a batch of preference shares that will pay a constant dividend of R8, beginning 6 years from now. If the required rate of return is 8%, what does

IET 3339, 1. If each sample taken has 500 units, and the average proportio...

1. If each sample taken has 500 units, and the average proportion nonconforming is 0.034, what is the upper and lower control limits for the p-chart? 2. If you sample 450 parts

Intervals, At a tennis tournament a statistician keeps track of every serve...

At a tennis tournament a statistician keeps track of every serve. The statistician reported that the mean serve speed of a particular player was 102 miles per hour (mph) and the st

Hypothesis, What is a hypothesis test? Why do we need to use them to make ...

What is a hypothesis test? Why do we need to use them to make decisions about relating sample results to the population; why can’t we just make our decisions by the sample value?

Need homework answers by midnight tonight, first question: Glaser Services ...

first question: Glaser Services acquired 30% of the outstanding common stock of Nickels Company on January 1, 2008, by paying $864,180 for the 48,010 shares. Nickels declared and p

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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