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Need accounting help with Internal Control and Cash

/in /by

P13-2A

The comparative statements of Osborne Company are presented here.

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Compute ratios from balance sheets and income statements.

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OSBORNE COMPANY

; ;

Income Statements

; ;

For the Years Ended December 31

; ;

; ;
; ; 		; ;

;2014 ;

; ;

; ;

;2013 ;

; ;

;

Net
; sales

;

;

$1,890,540

;

;

$1,750,500

;

;

Cost
; of goods sold

;

;

;1,058,540

;

;

;1,006,000

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;

Gross
; profit

;

;

832,000

;

;

744,500

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Selling
; and administrative expenses

;

;

;500,000

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;479,000

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Income
; from operations

;

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332,000

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265,500

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Other
; expenses and losses

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;Interest
; expense

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;22,000

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;20,000

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Income
; before income taxes

;

;

310,000

;

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245,500

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Income
; tax expense

;

;

;92,000

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;73,000

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Net
; income

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$ ;218,000
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$ ;172,500
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OSBORNE COMPANY

; ;

Balance Sheets

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December 31

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Assets

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;2014 ;

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;2013 ;

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Current
; assets

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;
;

;Cash

;

;

$ ;60,100

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$ ;64,200

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;Debt
; investments (short-term)

;

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74,000

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50,000

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;Accounts
; receivable

;

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117,800

;

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102,800

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;Inventory

;

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;126,000

;

;

;115,500

;

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;Total
; current assets

;

;

377,900

;

;

332,500

;

;

Plant
; assets (net)

;

;

;649,000

;

;

;520,300

;

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Total
; assets

;

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$1,026,900
;

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$852,800
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Liabilities and Stockholders’ Equity

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Current
; liabilities

;

;
; 		;
;
;

;Accounts
; payable

;

;

$ ;160,000

;

;

$145,400

;

;

;Income
; taxes payable

;

;

;43,500

;

;

;42,000

;

;

;Total
; current liabilities

;

;

;203,500

;

;

;187,400

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Bonds
; payable

;

;

;220,000

;

;

;200,000

;

;

;Total
; liabilities

;

;

;423,500

;

;

;387,400

;

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Stockholders’
; equity

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;

;Common
; stock ($5 par)

;

;

;290,000

;

;

;300,000

;

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;Retained
; earnings

;

;

;313,400

;

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;165,400

;

;

;Total
; stockholders’ equity

;

;

;603,400

;

;

;465,400

;

;

Total
; liabilities and stockholders’ equity

;

;

$1,026,900
;

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;

$852,800
;

;

All sales were on account. Net cash provided by operating activities for 2014 was $220,000. Capital expenditures were
$136,000, and cash dividends were $70,000.

Instructions

;

Compute the following ratios for 2014.

(a) Earnings per share.

(b) Return on common stockholders’ equity.

(c) Return on assets.

(d) Current ratio.

(e) Accounts receivable turnover.

(f) Average collection period.

(g) Inventory turnover.

(h) Days in inventory.

(i) Times interest earned.

(j) Asset turnover.

(k) Debt to assets.

(l) Current cash debt coverage.

(m) Cash debt coverage.

(n) Free cash flow

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