Condensed balance sheet and income statement data for Jergan Corporation are presented here. Jergan Corporation Balance Sheets December 31 2020 2019 2018 Cash $ 29,600 $ 17,000 $ 17,600 Accounts receivable (net) 50,600 44,300 48,300 Other current assets 90,300 94,500 64,500 Investments 55,000 70,000 44,700 Plant and equipment (net) 500,400 370,600 357,400 $725,900 $596,400 $532,500 Current liabilities $85,400 $79,800 $69,900 Long-term debt 144,900 84,300 50,900 Common stock, $10 par 351,000 310,000 300,000 Retained earnings 144,600 122,300 111,700 $725,900 $596,400 $532,500 Jergan Corporation Income Statement For the Years Ended December 31 2020 2019 Sales revenue $737,000 $605,800 Less: Sales returns and allowances 39,700 30,300 Net sales 697,300 575,500 Cost of goods sold 425,500 370,000 Gross profit 271,800 205,500 Operating expenses (including income taxes) 188,124 147,950 Net income $ 83,676 $ 57,550 Additional information: 1. The market price of Jergan’s common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively. 2. You must compute dividends paid. All dividends were paid in cash. (a) Compute the following ratios for 2019 and 2020. Where necessary, compute a simple average number of shares to approximate the weighted average number of shares. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 18%. Round all other answers to 1 decimal place, e.g. 6.8 or 6.8%.) 2019 2020 (1) Profit margin enter a percentage number rounded to 1 decimal place % enter a percentage number rounded to 1 decimal place % (2) Gross profit rate enter a percentage number rounded to 1 decimal place % enter a percentage number rounded to 1 decimal place % (3) Asset turnover enter a number rounded to 2 decimal places

Condensed balance sheet and income statement data for Jergan Corporation are presented here. Jergan Corporation Balance Sheets December 31 2020 2019 2018 Cash $ 29,600 $ 17,000 $ 17,600 Accounts receivable (net) 50,600 44,300 48,300 Other current assets 90,300 94,500 64,500 Investments 55,000 70,000 44,700 Plant and equipment (net) 500,400 370,600 357,400 $725,900 $596,400 $532,500 Current liabilities $85,400 $79,800 $69,900 Long-term debt 144,900 84,300 50,900 Common stock, $10 par 351,000 310,000 300,000 Retained earnings 144,600 122,300 111,700 $725,900 $596,400 $532,500 Jergan Corporation Income Statement For the Years Ended December 31 2020 2019 Sales revenue $737,000 $605,800 Less: Sales returns and allowances 39,700 30,300 Net sales 697,300 575,500 Cost of goods sold 425,500 370,000 Gross profit 271,800 205,500 Operating expenses (including income taxes) 188,124 147,950 Net income $ 83,676 $ 57,550 Additional information: 1. The market price of Jergan’s common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively. 2. You must compute dividends paid. All dividends were paid in cash. (a) Compute the following ratios for 2019 and 2020. Where necessary, compute a simple average number of shares to approximate the weighted average number of shares. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 18%. Round all other answers to 1 decimal place, e.g. 6.8 or 6.8%.) 2019 2020 (1) Profit margin enter a percentage number rounded to 1 decimal place % enter a percentage number rounded to 1 decimal place % (2) Gross profit rate enter a percentage number rounded to 1 decimal place % enter a percentage number rounded to 1 decimal place % (3) Asset turnover enter a number rounded to 2 decimal places

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 103.4C

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Question

Condensed balance sheet and income statement data for Jergan Corporation are presented here.

Jergan Corporation Balance Sheets December 31
	2020	2019		2018
Cash	$ 29,600		$ 17,000		$ 17,600
Accounts receivable (net)	50,600		44,300		48,300
Other current assets	90,300		94,500		64,500
Investments	55,000		70,000		44,700
Plant and equipment (net)	500,400		370,600		357,400
	$725,900		$596,400		$532,500
Current liabilities	$85,400		$79,800		$69,900
Long-term debt	144,900		84,300		50,900
Common stock, $10 par	351,000		310,000		300,000
Retained earnings	144,600		122,300		111,700
	$725,900		$596,400		$532,500

Jergan Corporation Income Statement For the Years Ended December 31
	2020	2019
Sales revenue	$737,000		$605,800
Less: Sales returns and allowances	39,700		30,300
Net sales	697,300		575,500
Cost of goods sold	425,500		370,000
Gross profit	271,800		205,500
Operating expenses (including income taxes)	188,124		147,950
Net income	$ 83,676		$ 57,550

Additional information:

1.		The market price of Jergan’s common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively.
2.		You must compute dividends paid. All dividends were paid in cash.

(a)

Compute the following ratios for 2019 and 2020. Where necessary, compute a simple average number of shares to approximate the weighted average number of shares. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 18%. Round all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)

		2019		2020
(1)	Profit margin	enter a percentage number rounded to 1 decimal place	%		enter a percentage number rounded to 1 decimal place	%
(2)	Gross profit rate	enter a percentage number rounded to 1 decimal place	%		enter a percentage number rounded to 1 decimal place	%
(3)	Asset turnover	enter a number rounded to 2 decimal places	times		enter a number rounded to 2 decimal places	times
(4)	Earnings per share	$enter a dollar amount rounded to 2 decimal places			$enter a dollar amount rounded to 2 decimal places
(5)	Price-earnings ratio	enter a number rounded to 1 decimal place	times		enter a number rounded to 1 decimal place	times
(6)	Payout ratio	enter a percentage number rounded to 0 decimal places	%		enter a percentage number rounded to 0 decimal places	%
(7)	Debt to assets ratio	enter a percentage number rounded to 0 decimal places	%		enter a percentage number rounded to 0 decimal places	%

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