Maurice Tutor
$15/per page/Negotiable
P14-2Â The comparative statements of Larker Tool Company are presented below.
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For the Years Ended December  31
2014Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 2013
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|
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 expense |
516,000 |
 |
479,000 |
|
Income from operations Other expenses and losses Interest expense |
291,000 Â 15,000 |
 |
275,500 Â 14,000 |
|
Income before income taxes |
276,000 |
 |
261,500 |
|
Income tax expense |
84,000 |
 |
77,000 |
|
Net income |
$Â Â 192,000 |
 |
$Â Â 184,500 |
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Larker Tool Company Balance Sheets December 31 |
 |
||
|
Assets                                                         2014 |
 |
 |
2013 |
|
Current assets Cash                                                                       $  60,100 |
 |
 |
 $  64,200 |
|
Short-term investments                                        69,000 |
 |
 |
50,000 |
|
Accounts receivable (net)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 105,750 |
 |
 |
102,800 |
|
Inventory                                                                110,950 |
 |
 |
115,500 |
|
Total current assets                                         345,800 |
 |
 |
332,500 |
|
Plant assets (net)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 600,300 |
 |
 |
520,300 |
|
Total assets                                                             $946,100 |
 |
 |
$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)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 300,000Â Â Â Â Â Â Â Â Â Â Â Â 300,000
Retained earnings                                                242,600            165,400
                             Â
Total stockholders’ equity                        542,600                                                                                         465,400 Total liabilities and stockholders’ equity         $946,100                                                                                    $852,800
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All sales were on account.
Instructions
Compute the following ratios for 2014. (Weighted-average common shares in 2014 were 60,000.)
(a) Earnings per share.                                              (f) Receivables turnover.
(b) Return on common stockholders’  equity.       (g) Inventory turnover.
(c)  Return on assets.                                                  (h) Times interest earned.
(d) Current.                                                                   (i) Asset turnover.
(e)  Acid-test.                                                                 (j) Debt to total assets.
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