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Scott, MIT Graduate
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Experience:  MIT Graduate (Math, Programming, Science, and Music)
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3 questions on accounting!

Customer Question

3 questions on accounting!
Submitted: 5 years ago.
Category: Homework
Expert:  Jabi replied 5 years ago.

Hello dear Customer!


Please post your questions i would love to help if i can.




Customer: replied 5 years ago.

The comparative statements of Villa Tool Company are presented below.
Income Statement

For the Year Ended December 31
2011 2010
Net sales $1,818,500 $1,750,500
Cost of goods sold 1,011,500 996,000
Gross profit 807,000 754,500
Selling and administrative expenses 516,000 479,000
Income from operations 291,000 275,500
Other expenses and losses
Interest expense 18,000 14,000
Income before income taxes 273,000 261,500
Income tax expens 81,000 77,000
Net income $ 192,000 $ 184,500

Balance Sheets
December 31

Assets 2011 2010
Current assets
Cash $ 60,100 $ 64,200
Short-term investments 69,000 50,000
Accounts receivable (net) 117,800 102,800
Inventory 123,000 115,500
Total current assets 369,900 332,500
Plant assets (net 600,300 520,300
Total assets $970,200 $852,800

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $160,000 $145,400
Income taxes payable 43,500 42,000
Total current liabilities 203,500 187,400
Bonds payable 200,000 200,000
Total liabilities 403,500 387,400
Stockholders' equity
Common stock ($5 par) 280,000 300,000
Retained earnings 286,700 165,400
Total stockholders' equity 566,700 465,400
Total liabilities and stockholders' equity $970,200 $852,800

All sales were on account. The allowance for doubtful accounts was $3,200 on December 31, 2011, and $3,000 on December 31, 2010.


Compute the following ratios for 2011. (Weighted average common shares in 2011 were 57,000.) (a) Earnings per share. (b) Return on common stockholders' equity. (c) Return on assets. (d) Current. (e) Acid-test. (f) Receivables turnover. (g) Inventory turnover. (h) Times interest earned. (i) Asset turnover. (j) Debt to total assets. (Round earnings per share, current ratio and acid-test ratio to 2 decimal places, e.g. 10.50. Round other answers to 1 decimal place, e.g. 10.5.)
(a) Earnings per share $
(b) Return on common stockholders; equity %
(c) Return on assets %
(d) Current :1
(e) Acid-test :1
(f) Receivables turnover times
(g) Inventory turnover times
(h) Times interest earned times
(i) Asset turnover times
(j) Debt to total assets %

Selected financial data of Target and Wal-Mart for a recent year are presented here (in millions).
Target Wal-Mart
Corporation Stores, Inc.
Income Statement Data for Year
Net sales $61,471 $374,526
Cost of goods sold 41,895 286,515
Selling and administrative expenses 16,200 70,847
Interest expense 647 1,798
Other income (expense) 1,896 4,273
Income tax expense 1,776 6,908
Net income $ 2,849 $ 12,731

Balance Sheet Data (End of Year)
Current assets $18,906 $ 47,585
Noncurrent ass 25,654 115,929
Total assets $44,560 $163,514

Current liabilities $ 11,782 $ 58,454
Long-term debt 17,471 40,452
Total stockholders' equity 15,307 64,608
Total liabilities and stockholders' equity $44,560 $163,514

Beginning-of-Year Balances
Total assets $37,349 $151,587
Total stockholders' equity 15,633 61,573
Current liabilities 11,117 52,148
Total liabilities 21,716 90,014
Other Data
Average net receivables $7,124 $ 3,247
Average inventory 6,517 34,433
Net cash provided by operating activities 4,125 20,354


For each company, compute the following ratios. (Round answers to 1 decimal place, e.g. 10.5.)
Target Walmart
(1) Current :1 :1
(2) Receivables turnover
(3) Average collection period
(4) Inventory turnover
(5) Days in inventory
(6) Profit margin % %
(7) Asset turnover
(8) Return on assets % %
(9) Return on common stockholders' equity % %
(10) Debt to total assets % %
(11) Times interest earned


Presented below is an incomplete income statement and an incomplete comparative balance sheet of Cotte Corporation.

Additional information:

1. The receivables turnover for 2011 is 10 times.

2. All sales are on account.

3. The profit margin for 2011 is 14.5%.

4. Return on assets is 22% for 2011.

5. The current ratio on December 31, 2011, is 3.0.

6. The inventory turnover for 2011 is 4.8 times.


Compute the missing information given the ratios above. (Note: Start with one ratio and derive as much information as possible from it before trying another ratio. List all missing amounts under the ratio used to find the information.)

Income Statement
For the Year Ended December 31, 2011

Sales $11,000,000
Cost of goods sold ?????

Gross profit ? ????
Operating expenses 1,665,000
Income from operations ????????
Other expenses and losses ??????????
Interest expense

Income before income taxes ????????
Income tax expense 560,000
Net income $ ???????

Balance Sheets
December 31
Assets 2011 2010
Current assets
Cash $ 450,000 $ 375,000 Accounts receivable(net) ??? 950,000
Inventory ??? 1,720,000
Total current assets ??? 3,045,000
Plant assets (net) 4,620,000 3,955,000
Total assets $ ??? $7,000,000

Liabilities and Stockholders' Equity
Current liabilities $ ??? $825,000
Long-term notes payable ??? 2,800,000
Total liabilities ??? 3,625,000
Common stock $1 par) 3,000,000 3,000,000
Retained earning 400,000 375,000
Total stockholders' equity 3,400,000 3,375,000
Total liabilities and stockholders' equity $ ??? $7,000,000

Expert:  Jabi replied 5 years ago.

Thank you for your reply


I don't think i can answer these questions, i am going to leave your questions open to other experts.


I hope you will get answers soon.



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