Lingenfelter Corporation experienced a fire on December 31 2

Lingenfelter Corporation experienced a fire on December 31, 2017, 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 December 31, 2017 Cash Accounts receivable (net)72,500 Inventory Accounts payable Notes payable Common stock, $100 par 400,000 Retained earnings 3120 $10,000 126,000 180,000 90,000 60,000 400,000 101,000 30,000 200,000 50,000 30,000 113,500 Additional information: 1. The inventory turnover is 4.5 times. 2. The return on common stockholders\' equity is 16%. The company had no additional paid-in capital 3. The accounts receivable turnover is 8.8 times 4. The return on assets is 12.5% 5. Total assets at December 31, 2016, were $655,000 Compute the following for Lingenfelter Corporation. (Round answers to 0 decimal places, e.g. 5,275.) (a) Cost of goods sold for 2017 (b) Net sales (credit) for 2017 (c) Net income for 2017 (d) Total assets at December 31, 2017 s

Solution

Solution:

Inventory turnover = cost of goods sold / average inventory

Average inventory = (beginning inventory + Ending inventory)/2

= ($180,000+ $200,000)/2 = $190,000

Now,

Inventory turnover = Cost of goods sold/average inventory

4.5 = cost of goods sold / $190,000

Cost of goods sold = $190000* 4.5 = $855,000

Solution b:

Accounts receivable turnover = Net credit sales/ average accounts receivable

Average accounts receivable = ($126000 + $72500)/2 = $99,250

Accounts receivable turnover = net credit sales/ Average accounts receivable

8.8 = net credit sales / $99250

Net credit sales = 99250 * 8.8 = $873,400

Solution c:

Average stockholders\' equity =[($400,000+$101,000) + ($400,000+$113,500)] /2 = $507,250

Return on common stockholders equity = net income / average common stockholders\' equity

.16 = net income/ $507250

Net income = $81,160

Solution d:

Return on assets = Net income / averages total assets

.125 = $81160 / average total assets

Average total assets = $81160/.125 = $649,280

Average total assets = (beginning total assets + ending total assets)/2

$649,280 = ($655,000 + Ending total assets) /2

Ending total assets = ($649280*2) - $655000 = $643,560