Kieso Intermediate Accounting 16e End Time 1159 PM Remaining

Kieso, Intermediate Accounting, 16e End Time: 11:59 PM/ Remaining:4296 min. Exercise 91 The following information pertains to Wamser Company: Cash Accounts receivable Inventory Plant assets (net) Total assets $22,500 125,000 75,500 382,500 $605,500 Accounts payable Accrued taxes and expenses payable Long-term debt Common stock ($10 par) Paid-in capital in excess of par Retained earnings Total equities $75,500 25,500 50,000 165,000 88,500 201,000 $605,500 Net sales (all on credit) $804,500 600,000 80,500 Cost of goods sold Net income Compute the following: (Round answers to 2 decimal places e.g. 15.25.) (a) Current ratio (b) Inventory turnover (c) Accounts receivable turnover (d) Book value per share (e) Earnings per share (f) Debt to assets (o) Profit margin on sales (h) Return on common stock holders\' equity Click if you would like to Show Work for this question: Open Show Work times times

Solution

a. Current Ratio = Current Assets/Current Liabilities

= (Cash + Accounts Receivable + Inventory) / (Accounts Payable+ Accrued taxes and expenses payable)

= (22500+125000+75500) / (75500+ 25500)

= 2.21 :1

b. Inventory Turnover Ratio = Cost of Goods Sold/ Inventory

= 600,000/ 75500 = 7.95

c. Accounts Receivable Turnover Ratio = Net Credit Sales/ Accounts Receivable

= 804,500/ 125,000 = 6.43

d. Book Value per share = Stockholders Equity / No of common stock

= (165000+ 88500 + 201000) / 16500 = 27.54

e. Earnings per share = Net Income / No of common stock

= 80500/16500 = 4.88

f. Debt to Assets = Long Term Debt/ Total Assets

= 50,000/605,500 = 8.26%

g. Profit margin on sales = Net Profit / Net Sales

= 80,500/ 804,500 = 10.00%

h. Return on common stock holders\' equity = Net Income / Common stock holders\' equity

= 80500/ (165000+ 88500 + 201000)? = 17.71%