ACCOUNTING er 12 Homework Problems The following information

ACCOUNTING er 12 Homework Problems [The following information applies to the questions displayed below) Income statement and balance sheet data for The Athletic Attic are provided below. THE ATHLETIC ATTIC Income Statements For the years ended December 31 2019 2018 Net sales Cost of goods sold $11,520,000 $10,000,000 7,520,000 6,200,000 Gross profit 4,000,000 3,800,000 Expenses: Operating expenses Depreciation expense Interest expense Income tax expense 1,680,0001630,000 200,000 48,000 430,000 200,000 48,000 496,000 Total expenses 2,424,000 2,308,000 Net income $1,576,00o $1,492,000 THE ATHLETIC ATTIC

Solution

Answer 1 2018 2019 a Receivable turnover ratio =10,000,000/((768,000+748,000)/2) =11,520,000/((998,000+748,000)/2) =Credit Sales/(Beginning accounts receivable+Ending accounts receivable)/2                                         13.19 times                           13.20 times b Inventory Turnover ratio =6,200,000/((1,033,000+1,363,000)/2) =7,520,000/((1,733,000+1,363,000)/2) (Cost of goods Sold/Average Inventory) 5.175292154 times 4.857881137 times c Current ratio =2,381,000/172,000 =3,102,000/250,800 (current Asset/Current Liability)                                         13.84 to 1                           12.37 to 1 where, Current Asset = =162,000+748,000+1,363,000+108,000 =233,000+998,000+1,733,000+138,000                            23,81,000.00              31,02,000.00 Current liabilities = =129,000+0+43,000 =198,000+4,800+48,000                               1,72,000.00                2,50,800.00 d Debt to equity ratio =752,000/2,569,000 =830,800/3,011,000 (Total Liability/Stockholder\'s Equity) 29.27% 27.59% where, Total liabilities = =Current liabilities+Non-current liabilities =Current liabilities+Non-current liabilities =172,000+580,000 =250,800+580,000 752000 830800 Stockholder\'s equity =680,000+1,889,000 =680,000+2,331,000 2569000 3011000