Answer each of the questions in the following unrelated situations. (a) The current ratio of a company is 6:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $494,800, what is the amount of current liabilities? Current Lia

Answer each of the questions in the following unrelated situations.

(a) The current ratio of a company is 6:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $494,800, what is the amount of current liabilities?

Current Liabilities

$ [removed]

(b) A company had an average inventory last year of $159,000 and its inventory turnover was 6. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year? (Round answer to 0 decimal places, e.g. 125.)

Average Inventory

$ [removed]

(c) A company has current assets of $89,370 (of which $36,250 is inventory and prepaid items) and current liabilities of $36,250. What is the current ratio? What is the acid-test ratio? If the company borrows $10,270 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be? (Round answers to 2 decimal places, e.g. 2.50.)

Current Ratio		[removed]	:1
Acid Test Ratio		[removed]	:1
New Current Ratio		[removed]	:1
New Acid Test Ratio		[removed]	:1

(d) A company has current assets of $583,200 and current liabilities of $235,100. The board of directors declares a cash dividend of $173,600. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the dividend? (Round answers to 2 decimal places, e.g. 2.50.)

Current ratio after the declaration but before payment		[removed]	:1
Current ratio after the payment of the dividend		[removed]	:1

The following information pertains to Wamser Company:

Cash		$22,000
Accounts receivable		125,500
Inventory		74,500
Plant assets (net)		384,000
Total assets		$606,000
Accounts payable		$74,500
Accrued taxes and expenses payable		24,500
Long-term debt		49,500
Common stock ($10 par)		165,000
Paid-in capital in excess of par		89,000
Retained earnings		203,500
Total equities		$606,000
Net sales (all on credit)		$801,000
Cost of goods sold		605,000
Net income		80,500

Compute the following: (Round answers to 2 decimal places e.g. 15.25.)

(a)		Current ratio		[removed]	: 1
(b)		Inventory turnover		[removed]	times
(c)		Accounts receivable turnover		[removed]	times
(d)		Book value per share		$ [removed]
(e)		Earnings per share		$ [removed]
(f)		Debt to assets		[removed]	%
(g)		Profit margin on sales		[removed]	%
(h)		Return on common stock equity		[removed]	%

The following data is given:

		December 31,
		2015			2014
Cash		$65,500			$51,000
Accounts receivable (net)		89,500			59,000
Inventories		89,500			115,000
Plant assets (net)		383,000			325,000
Accounts payable		55,000			40,000
Salaries and wages payable		10,000			5,000
Bonds payable		70,500			71,000
8% Preferred stock, $40 par		100,000			100,000
Common stock, $10 par		120,000			90,000
Paid-in capital in excess of par		85,000			70,000
Retained earnings		187,000			174,000
Net credit sales		905,000
Cost of goods sold		745,000
Net income		83,000

Compute the following ratios: (Round answers to 2 decimal places e.g. 15.25.)

(a)		Acid-test ratio at 12/31/15		[removed]	: 1
(b)		Accounts receivable turnover in 2015		[removed]	times
(c)		Inventory turnover in 2015		[removed]	times
(d)		Profit margin on sales in 2015		[removed]	%
(e)		Return on common stock equity in 2015		[removed]	%
(f)		Book value per share of common stock at 12/31/15           As loan analyst for Utrillo Bank, you have been presented the following information.     Toulouse Co.   Lautrec Co. Assets             Cash   $116,300     $311,800   Receivables   220,600     305,700   Inventories   573,900     512,000      Total current assets   910,800     1,129,500   Other assets   500,500     617,600      Total assets   $1,411,300     $1,747,100                 Liabilities and Stockholders’ Equity             Current liabilities   $303,300     $350,200   Long-term liabilities   403,900     500,500   Capital stock and retained earnings   704,100     896,400      Total liabilities and stockholders’ equity   $1,411,300     $1,747,100   Annual sales   $944,400     $1,494,000   Rate of gross profit on sales   30 %   35 % Each of these companies has requested a loan of $49,190 for 6 months with no collateral offered. Because your bank has reached its quota for loans of this type, only one of these requests is to be granted. Compute the various ratios for each company. (Round answer to 2 decimal places, e.g. 2.25.)     Toulouse Co.   Lautrec Co. Current ratio   [removed]  : 1   [removed]  : 1 Acid-test ratio   [removed]  : 1   [removed]  : 1 Accounts receivable turnover   [removed]  times   [removed]  times Inventory turnover   [removed]  times   [removed]  times Cash to current liabilities   [removed]  : 1   [removed]  : 1     Bradburn Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Bradburn and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2015, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $35,120 notes, which are due on June 30, 2015, and September 30, 2015. Another note of $6,450 is due on March 31, 2016, but he expects no difficulty in paying this note on its due date. Brown explained that Bradburn’s cash flow problems are due primarily to the company’s desire to finance a $306,700 plant expansion over the next 2 fiscal years through internally generated funds. The commercial loan officer of Topeka National Bank requested financial reports for the last 2 fiscal years. BRADBURN CORPORATION BALANCE SHEET MARCH 31 Assets   2015   2014 Cash   $18,700   $13,020 Notes receivable   148,930   133,260 Accounts receivable (net)   132,830   126,510 Inventories (at cost)   105,160   51,630 Plant & equipment (net of depreciation)   1,459,800   1,422,000     Total assets   $1,865,420   $1,746,420           Liabilities and Owners’ Equity         Accounts payable   $81,630   $91,500 Notes payable   76,690   63,050 Accrued liabilities   16,718   9,000 Common stock (130,000 shares, $10 par)   1,300,000   1,300,000 Retained earningsa   390,382   282,870     Total liabilities and stockholders’ equity   $1,865,420   $1,746,420           aCash dividends were paid at the rate of $1 per share in fiscal year 2014 and $2 per share in fiscal year 2015.   BRADBURN CORPORATION INCOME STATEMENT FOR THE FISCAL YEARS ENDED MARCH 31     2015   2014 Sales revenue   $3,013,400   $2,719,000 Cost of goods solda   1,539,400   1,431,400 Gross margin   1,474,000   1,287,600 Operating expenses   861,480   790,300 Income before income taxes   612,520   497,300 Income taxes (40%)   245,008   198,920 Net income   $367,512   $298,380           aDepreciation charges on the plant and equipment of $110,200 and $112,800 for fiscal years ended March 31, 2014 and 2015, respectively, are included in cost of goods sold. (a) Compute the following items for Bradburn Corporation. (Round answer to 2 decimal places, e.g. 2.25.) (1)   Current ratio for fiscal years 2014 and 2015. (2)   Acid-test (quick) ratio for fiscal years 2014 and 2015. (3)   Inventory turnover for fiscal year 2015. (4)   Return on assets for fiscal years 2014 and 2015. (Assume total assets were $1,693,000 at 3/31/13.) (5)   Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year 2014 to 2015.           2014   2015 (1)   Current ratio   [removed]  :1   [removed]  :1 (2)   Acid-test (quick) ratio   [removed]  :1   [removed]  :1 (3)   Inventory turnover         [removed]  times (4)   Return on assets   [removed] %   [removed] %   (5)   Percent Changes   Percent Increase     Sales revenue   [removed] %     Cost of goods sold   [removed] %     Gross margin   [removed] %     Net income after taxes   [removed] %