E14-10 Rees Corporation experienced a fire on December 31, 2014, in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances.

 

December 31, 2014           December 31, 2013

Cash	$  30,000	Â	$ 10,000
Receivables (net)	73,000	Â	126,000
Inventory	200,000	Â	180,000
Accounts payable	50,000	Â	90,000
Notes payable	30,000	Â	60,000
Common stock, $100 par	400,000	Â	400,000
Retained earnings	134,000	Â	122,000

 

Additional information:

1.  The inventory turnover is 3.4 times.

2.  The return on common stockholders’ equity is 25%. The company had no additional paid-in capital.

3.  The receivables turnover is 8.8 times.

4.  The return on assets is 20%.

5.  Total assets at December 31, 2013, were $650,000.

 

Instructions

Compute the following for Rees  Corporation.

(a)  Cost of goods sold for 2014.

(b)  Net sales (credit) for 2014.

(c)   Net income for 2014.

(d)  Total assets at December 31, 2014.

 

 

 

 

 

58

E14-11  Yadier Corporation’s comparative balance sheets are presented below.

 

  2014 2013   Cash $    4,300 $    3,700 Accounts receivable 22,000 24,000 Inventory 10,000 7,000 Land 20,000 26,000 Buildings 70,000 70,000 Accumulated depreciation—buildings (15,000) (10,000) Total $111,300 $120,700 Accounts payable $  12,000 $  31,100 Common stock 75,000 69,000 Retained earnings 24,300 20,600 Total $111,300 $120,700 Yadier’s  2014  income  statement  included  net  sales $60,350, and net income of $14,000. of  $100,000, cost  of  goods  sold of Instructions Compute the following ratios for 2014.       (a)  Current ratio. (b)  Acid-test ratio. (c)   Receivables turnover. (d)  Inventory turnover. (e)   Profit margin. (f)   Asset turnover. (g)   Return on assets. (h)  Return on common stockholders’ equity. (i)   Debt to total assets ratio.         Â

Yadier Corporation Balance Sheets December 31