Business, 31.05.2020 03:57 datands

The balance sheets for Plasma Screens Corporation and additional information are provided below. PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Current assets: Cash $ 242,000 $ 130,000 Accounts receivable 98,000 102,000 Inventory 105,000 90,000 Investments 5,000 3,000 Long-term assets: Land 580,000 580,000 Equipment 890,000 770,000 Less: Accumulated depreciation (528,000 ) (368,000 ) Total assets $ 1,392,000 $ 1,307,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 109,000 $ 95,000 Interest payable 7,000 13,000 Income tax payable 9,000 6,000 Long-term liabilities: Notes payable 110,000 220,000 Stockholders' equity: Common stock 800,000 800,000 Retained earnings 357,000 173,000 Total liabilities and stockholders' equity $ 1,392,000 $ 1,307,000 Additional information for 2021: Net income is $184,000. Sales on account are $1,890,000. Cost of goods sold is $1,394,250. Required: 1. Calculate the following risk ratios for 2021:

Answers: 1

Show answers

Answers

Answer from: RyleyM

The risk ratios are determined as follows:

1. Account Receivable Turnover

= Net credit Sales ÷ Average Accounts Receivable

= $1,890,000 ÷ (($98,000 + $102,000) ÷ 2)

= $1,890,000 ÷ $100,000

= 18.9 times

It represents the relationship between the net credit sales and the average account receivable.

2. Inventory Turnover = Cost of Goods Sold ÷ Average Inventory

= $1394250 ÷ (($105,000 + $90,000) ÷ 2)

= $1,394,250 ÷ $97,500

= 14.3 times

It represents the relationship between the cost of goods sold and the average inventory.

c. Current Ratio = Current assets ÷ Current Liabilities

= ($242,000 + $98,000 + $105,000 + $5,000) ÷ ($109,000 + $7,000 + $9,000)

= $450,000 ÷ $125,000

= 3.6 times

It represents the relationship between the current assets and the current liabilities.

d. Acid Test Ratio = Liquid assets ÷ Current Liabilities

= ($450,000 - $105,000) ÷ ($125,000 )

= $345,000 ÷ $125,000

= 2.76 times

It represents the relationship between the liquid assets in which it does include prepaid assets, inventory, etc and the current liabilities.

e. Debt to Equity = Debt ÷ Equity

= ($109,000 + $7,000 + $9,000 + $110,000) ÷ ($800,000 + $357,000 )

= $235,000 ÷ $1,157,000

= 0.203

It represents the relationship between the debt and equity.

Learn more: link

Answer from: xxhighwolfxx7508

Answer and Explanation:

The risk ratios are calculated below:

1. Account Receivable Turnover

= Net credit Sales ÷ Average Accounts Receivable

= $1,890,000 ÷ (($98,000 + $102,000) ÷ 2)

= $1,890,000 ÷ $100,000

= 18.9 times

It shows the relation between the net credit sales and the average account receivable

2. Inventory Turnover = Cost of Goods Sold ÷ Average Inventory

= $1394250 ÷ (($105,000 + $90,000) ÷ 2)

= $1,394,250 ÷ $97,500

= 14.3 times

It shows the relation between the cost of goods sold and the average inventory

c. Current Ratio = Current assets ÷ Current Liabilities

= ($242,000 + $98,000 + $105,000 + $5,000) ÷ ($109,000 + $7,000 + $9,000)

= $450,000 ÷ $125,000

= 3.6 times

It shows the relation between the current assets and the current liabilities

d. Acid Test Ratio = Liquid assets ÷ Current Liabilities

= ($450,000 - $105,000) ÷ ($125,000 )

= $345,000 ÷ $125,000

= 2.76 times

It shows the relation between the liquid assets which do not involved prepaid assets, inventory, etc and the current liabilities

e. Debt to Equity = Debt ÷ Equity

= ($109,000 + $7,000 + $9,000 + $110,000) ÷ ($800,000 + $357,000 )

= $235,000 ÷ $1,157,000

= 0.203

It shows the relation between the debt and equity

Answer from: Quest

This is true for sure

Answer from: Quest

The answer should be b.

Another question on Business

Business, 22.06.2019 02:30

When interest is compounded continuously, the amount of money increases at a rate proportional to the amount s present at time t, that is, ds/dt = rs, where r is the annual rate of interest. (a) find the amount of money accrued at the end of 3 years when $4000 is deposited in a savings account drawing 5 3 4 % annual interest compounded continuously. (round your answer to the nearest cent.) $ (b) in how many years will the initial sum deposited have doubled? (round your answer to the nearest year.) years (c) use a calculator to compare the amount obtained in part (a) with the amount s = 4000 1 + 1 4 (0.0575) 3(4) that is accrued when interest is compounded quarterly. (round your answer to the nearest cent.) s = $

Answers: 1

Answer

Business, 22.06.2019 04:00

Consider the market for gasoline. suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon, and employees at gas stations earn $17.50 per hour. complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it results in a shortage or a surplus or has no effect on the price and quantity that prevail in the market. statement price control effect the government has instituted a legal minimum price of $3.40 per gallon for gasoline. the government prohibits gas stations from selling gasoline for more than $3.40 per gallon. due to new regulations, gas stations that would like to pay better wages in order to hire more workers are prohibited from paying more than $14.50 per hour.

Answers: 2

Answer

Business, 22.06.2019 06:40

Burke enterprises is considering a machine costing $30 billion that will result in initial after-tax cash savings of $3.7 billion at the end of the first year, and these savings will grow at a rate of 2 percent per year for 11 years. after 11 years, the company can sell the parts for $5 billion. burke has a target debt/equity ratio of 1.2, a beta of 1.79. you estimate that the return on the market is 7.5% and t-bills are currently yielding 2.5%. burke has two issuances of bonds outstanding. the first has 200,000 bonds trading at 98% of par, with coupons of 5%, face of $1000, and maturity of 5 years. the second has 500,000 bonds trading at par, with coupons of 7.5%, face of $1000, and maturity of 12 years. kate, the ceo, usually applies an adjustment factor to the discount rate of +2 for such highly innovative projects. should the company take on the project?

Answers: 1

Answer

Business, 22.06.2019 10:00

Scenario: you have advised the owner of bond's gym that the best thing to do would be to raise the price of a monthly membership. the owner wants to know what may happen once this price increase goes into effect. what will most likely occur after the price of a monthly membership increases? check all that apply. current members will pay more per month. the quantity demanded for memberships will decrease. the number of available memberships will increase. the owner will make more money. bond's gym will receive more membership applications.

Answers: 1

Answer

You know the right answer?

The balance sheets for Plasma Screens Corporation and additional information are provided below. PLA...

Questions