60.1K

Verified Solution

Link Copied!

13-4\

Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $54,900; total assets, $249,400; common stock, $89,000; and retained earnings, $31,004.)

CABOT CORPORATION Income Statement For Year Ended December 31, 2017
Sales	$	455,600
Cost of goods sold		298,150
Gross profit		157,450
Operating expenses		98,800
Interest expense		4,400
Income before taxes		54,250
Income taxes		21,854
Net income	$	32,396

CABOT CORPORATION Balance Sheet December 31, 2017
Assets				Liabilities and Equity
Cash	$	14,000		Accounts payable	$	17,500
Short-term investments		8,800		Accrued wages payable		4,400
Accounts receivable, net		33,400		Income taxes payable		3,500
Notes receivable (trade)*		4,500
Merchandise inventory		36,150		Long-term note payable, secured by mortgage on plant assets		69,400
Prepaid expenses		3,050		Common stock		89,000
Plant assets, net		147,300		Retained earnings		63,400
Total assets	$	247,200		Total liabilities and equity	$	247,200

* These are short-term notes receivable arising from customer (trade) sales. Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)

Answer & Explanation Solved by verified expert

See Answer