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Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution.   d. Accounts Receivable Turnover Ratio   e. Average Collection Period   f. Inventory Turnover Ratio

Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution.   d. Accounts Receivable Turnover Ratio   e. Average Collection Period   f. Inventory Turnover Ratio

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:James A. Heintz, Robert W. Parry
Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business
Section: Chapter Questions
Problem 4CE
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1. Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution.

 

d. Accounts Receivable Turnover Ratio

 

e. Average Collection Period

 

f. Inventory Turnover Ratio

 

g. Average Days in Inventory

 

h. Number of days in Operating Cycle

 

i. Debt to Total Assets Ratio

 

j. Debt to Equity Ratio

 

k. Times Interest Earned Ratio

 

l. Gross Profit Ratio

 

m. Profit Margin Ratio

 

n. Return on Assets

 

o. Return on Equity

 

p. Assets Turnover Ratio

What I Can Do Activity 5.5. Solving the Problem Presented below is the Comparative Financial Statements of Tan General Merchandise for the year 2018 and 2019: TAN GENERAL MERCHANDISE Comparative Statement of Financial Position For the Year 2018 & 2019 2018 2019 ASSETS Cash Accounts Receivable Inventory Prepaid Rent Total Current Assets 87,400.00 69,920.00 218,500.00 4,370.00 380, 190.00 110,000.00 90,000.00 129,000.00 12,000.00 341,000.00 Land Building Total Noncurrent Assets 493,810.00 500,000.00 993,810.00 550,000.00 600,000.00 1,150.000.00 TOTAL ASSETS 1,374,000.00 1,491,000.00 LIABILITIES Accounts Payable Notes payable Total Current Liabilities 250,000.00 150,000,00 400.000.00 200,000.00 300.000.00 500,000.00 Mortgage Payable Loan Payable Total Noncurrent Liabilities 160,000.00 150,000.00 310,000.00 180,000.00 200,000.00 380,000.00 TOTAL LIABILITIES 710,000.00 880,000.00 OWNER'S EQUITY 664,000.00 1,374,000.00 611.000.00 Tan, Capital Total Liabilities & Owner's Equity 1,491,000.00 22 TAN GENERAL MERCHANDISE Comparative Statement of Comprehensive Income For the Year 2018 & 2019 2018 Net Sales Cost of Goods Sold Gross Profit Operating Expenses Earnings Before Interest and Taxes 131,900.00 Interest Expense Net Income Before Tax 2019 810,000.00 301.750.00 508,250.00 234,900,00 273,350.00 40.500.00 232,850.00 69,855.00 686,000.00 348,300.00 337,700.00 205,800.00 17.150.00 114,750.00 34,425.00 80,325.00 Income Tax Net Income After Tax 162,995.00
Transcribed Image Text:What I Can Do Activity 5.5. Solving the Problem Presented below is the Comparative Financial Statements of Tan General Merchandise for the year 2018 and 2019: TAN GENERAL MERCHANDISE Comparative Statement of Financial Position For the Year 2018 & 2019 2018 2019 ASSETS Cash Accounts Receivable Inventory Prepaid Rent Total Current Assets 87,400.00 69,920.00 218,500.00 4,370.00 380, 190.00 110,000.00 90,000.00 129,000.00 12,000.00 341,000.00 Land Building Total Noncurrent Assets 493,810.00 500,000.00 993,810.00 550,000.00 600,000.00 1,150.000.00 TOTAL ASSETS 1,374,000.00 1,491,000.00 LIABILITIES Accounts Payable Notes payable Total Current Liabilities 250,000.00 150,000,00 400.000.00 200,000.00 300.000.00 500,000.00 Mortgage Payable Loan Payable Total Noncurrent Liabilities 160,000.00 150,000.00 310,000.00 180,000.00 200,000.00 380,000.00 TOTAL LIABILITIES 710,000.00 880,000.00 OWNER'S EQUITY 664,000.00 1,374,000.00 611.000.00 Tan, Capital Total Liabilities & Owner's Equity 1,491,000.00 22 TAN GENERAL MERCHANDISE Comparative Statement of Comprehensive Income For the Year 2018 & 2019 2018 Net Sales Cost of Goods Sold Gross Profit Operating Expenses Earnings Before Interest and Taxes 131,900.00 Interest Expense Net Income Before Tax 2019 810,000.00 301.750.00 508,250.00 234,900,00 273,350.00 40.500.00 232,850.00 69,855.00 686,000.00 348,300.00 337,700.00 205,800.00 17.150.00 114,750.00 34,425.00 80,325.00 Income Tax Net Income After Tax 162,995.00
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