BRIEF EXERCISE 18

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Brief Exercise 18-11 (Part Level Submission)

The following data are taken from the financial statements of Rainsberger Company.

	2015	2014
Accounts receivable (net), end of year	$550,000	$520,000
Net sales on account	3,960,000	3,100,000
Terms for all sales are 1/10, n/60.

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(a1)

Compute for each year the accounts receivable turnover. At the end of 2013, accounts receivable (net) was $480,000. (Round answers to 1 decimal place, e.g. 1.6.)

		2015		2014
Accounts receivable turnover		[removed]times		[removed]times

Brief Exercise 18-12 (Part Level Submission)

The following data are from the income statements of Haskin Company.

	2015	2014
Sales	$6,420,000	$6,240,000
Beginning inventory	940,000	860,000
Purchases	4,340,000	4,661,000
Ending inventory	1,020,000	940,000

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(a1)

Compute for each year the inventory turnover. (Round answers to 1 decimal place, e.g. 1.6.)

		2015		2014
Inventory turnover		[removed]times		[removed]times

(a2)

The parts of this question must be completed in order. This part will be available when you complete the part above.

Brief Exercise 18-13

Guo Company has owners’ equity of $400,000 and net income of $66,000. It has a payout ratio of 20% and a return on assets of 15%.

How much did Guo pay in cash dividends, and what were its average assets? (Round answers to 0 decimal places, e.g. 125.)

Cash dividends		$[removed]
Average assets		$[removed]

Exercise 18-2

Operating data for Navarro Corporation are presented below.

	2015	2014
Net sales	$750,000	$600,000
Cost of goods sold	465,000	390,000
Selling expenses	105,000	66,000
Administrative expenses	60,000	54,000
Income tax expense	36,000	27,000
Net income	84,000	63,000

Prepare a schedule showing a vertical analysis for 2015 and 2014. (Round answers to 1 decimal place, e.g. 48.5%.)

NAVARRO CORPORATION Condensed Income Statements For the Years Ended December 31
	2015		2014
	Amount	Percent	Amount	Percent
Net sales	$750,000	[removed]%	$600,000	[removed]%
Cost of goods sold	465,000	[removed]%	390,000	[removed]%
Gross profit	285,000	[removed]%	210,000	[removed]%
Selling expenses	105,000	[removed]%	66,000	[removed]%
Administrative expenses	60,000	[removed]%	54,000	[removed]%
Total operating expenses	165,000	[removed]%	120,000	[removed]%
Income before income taxes	120,000	[removed]%	90,000	[removed]%
Income taxes expense	36,000	[removed]%	27,000	[removed]%
Net income	$84,000	[removed]%	$63,000	[removed]%

Exercise 18-5

Suppose Nordstrom, Inc., which operates department stores in numerous states, has the following selected financial statement data for the year ending January 30, 2014.

NORDSTORM, INC. Balance Sheet (partial)
(in millions)	End-of-Year		Beginning-of-Year
Cash and cash equivalents		$ 795		$ 72
Accounts receivable (net)		2,035		1,942
Inventory		898		900
Prepaid expenses		88		93
Other current assets		238		210
Total current assets		$4,054		$3,217
Total current liabilities		$2,014		$1,601

For the year, net sales were $8,258 and cost of goods sold was $5,328 (in millions).

(a)

Compute the four liquidity ratios at the end of the year. (Round answers to 1 decimal place, e.g. 1.6 .)