Financial statements for Rundle Company follow. RUNDLE COMPANY Balance Sheets As of December 31 Year 4 Year 3 Assets Current assets Cash $ 22,000 $ 18,000 Marketable securities 21,200 7,200 Accounts receivable (net) 53,000 45,000 Inventories 138,000 146,000 Prepaid items 27,000 12,000 Total current assets 261,200 228,200 Investments 27,000 20,000 Plant (net) 270,000 255,000 Land 30,000 25,000 Total assets $ 588,200 $ 528,200 Liabilities and Stockholders’ Equity Liabilities Current liabilities Notes payable $ 31,800 $ 13,500 Accounts payable 133,800 120,000 Salaries payable 21,000 15,000 Total current liabilities 186,600 148,500 Noncurrent liabilities Bonds payable 100,000 100,000 Other 27,000 22,000 Total noncurrent liabilities 127,000 122,000 Total liabilities 313,600 270,500 Stockholders’ equity Preferred stock, (par value $10, 4% cumulative, non-participating; 7,000 shares authorized and issued) 70,000 70,000 Common stock (no par; 50,000 shares authorized; 10,000 shares issued) 70,000 70,000 Retained earnings 134,600 117,700 Total stockholders’ equity 274,600 257,700 Total liabilities and stockholders’ equity $ 588,200 $ 528,200 d. Receivables turnover (beginning receivables at January 1, Year 3, were $46,000). (Round your answers to 2 decimal places.) e. Average days to collect accounts receivable. (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) f. Inventory turnover (beginning inventory at January 1, Year 3, was $152,000). (Round your answers to 2 decimal places.) g. Number of days to sell inventory. (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) h. Debt-to-assets ratio. (Round your answers to the nearest whole percent.) i. Debt-to-equity ratio. (Round your answers to 2 decimal places.) j. Number of times interest was earned. (Round your answers to 2 decimal places.) k. Plant assets to long-term debt. (Round your answers to 2 decimal places.) l. Net margin. (Round your answers to 2 decimal places.) m. Turnover of assets (average total assets in Year 3 is $528,200). (Round your answers to 2 decimal places.) n. Return on investment (average total assets in Year 3 is $528,200). (Round your answers to 2 decimal places.) o. Return on equity (average stockholders' equity in Year 3 is $257,700). (Round your answers to 2 decimal places.) p. Earnings per share (total shares outstanding is unchanged). (Round your answers to 2 decimal places.) q. Book value per share of common stock. (Round your answers to 2 decimal places.) r. Price-earnings ratio (market price per share: Year 3, $12.35; Year 4, $13.70). (Round your intermediate calculations and final answer to 2 decimal places.) s. Dividend yield on common stock. (Round your answers to 2 decimal places.)

Financial statements for Rundle Company follow. RUNDLE COMPANY Balance Sheets As of December 31 Year 4 Year 3 Assets Current assets Cash $ 22,000 $ 18,000 Marketable securities 21,200 7,200 Accounts receivable (net) 53,000 45,000 Inventories 138,000 146,000 Prepaid items 27,000 12,000 Total current assets 261,200 228,200 Investments 27,000 20,000 Plant (net) 270,000 255,000 Land 30,000 25,000 Total assets $ 588,200 $ 528,200 Liabilities and Stockholders’ Equity Liabilities Current liabilities Notes payable $ 31,800 $ 13,500 Accounts payable 133,800 120,000 Salaries payable 21,000 15,000 Total current liabilities 186,600 148,500 Noncurrent liabilities Bonds payable 100,000 100,000 Other 27,000 22,000 Total noncurrent liabilities 127,000 122,000 Total liabilities 313,600 270,500 Stockholders’ equity Preferred stock, (par value $10, 4% cumulative, non-participating; 7,000 shares authorized and issued) 70,000 70,000 Common stock (no par; 50,000 shares authorized; 10,000 shares issued) 70,000 70,000 Retained earnings 134,600 117,700 Total stockholders’ equity 274,600 257,700 Total liabilities and stockholders’ equity $ 588,200 $ 528,200 d. Receivables turnover (beginning receivables at January 1, Year 3, were $46,000). (Round your answers to 2 decimal places.) e. Average days to collect accounts receivable. (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) f. Inventory turnover (beginning inventory at January 1, Year 3, was $152,000). (Round your answers to 2 decimal places.) g. Number of days to sell inventory. (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) h. Debt-to-assets ratio. (Round your answers to the nearest whole percent.) i. Debt-to-equity ratio. (Round your answers to 2 decimal places.) j. Number of times interest was earned. (Round your answers to 2 decimal places.) k. Plant assets to long-term debt. (Round your answers to 2 decimal places.) l. Net margin. (Round your answers to 2 decimal places.) m. Turnover of assets (average total assets in Year 3 is $528,200). (Round your answers to 2 decimal places.) n. Return on investment (average total assets in Year 3 is $528,200). (Round your answers to 2 decimal places.) o. Return on equity (average stockholders' equity in Year 3 is $257,700). (Round your answers to 2 decimal places.) p. Earnings per share (total shares outstanding is unchanged). (Round your answers to 2 decimal places.) q. Book value per share of common stock. (Round your answers to 2 decimal places.) r. Price-earnings ratio (market price per share: Year 3, $12.35; Year 4, $13.70). (Round your intermediate calculations and final answer to 2 decimal places.) s. Dividend yield on common stock. (Round your answers to 2 decimal places.)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 21BEA: The income statement, statement of retained earnings, and balance sheet for Somerville Company are...

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Financial statements for Rundle Company follow.

RUNDLE COMPANY
Balance Sheets As of December 31
	Year 4		Year 3
Assets
Current assets
Cash	$	22,000		$	18,000
Marketable securities		21,200			7,200
Accounts receivable (net)		53,000			45,000
Inventories		138,000			146,000
Prepaid items		27,000			12,000
Total current assets		261,200			228,200
Investments		27,000			20,000
Plant (net)		270,000			255,000
Land		30,000			25,000
Total assets	$	588,200		$	528,200
Liabilities and Stockholders’ Equity
Liabilities
Current liabilities
Notes payable	$	31,800		$	13,500
Accounts payable		133,800			120,000
Salaries payable		21,000			15,000
Total current liabilities		186,600			148,500
Noncurrent liabilities
Bonds payable		100,000			100,000
Other		27,000			22,000
Total noncurrent liabilities		127,000			122,000
Total liabilities		313,600			270,500
Stockholders’ equity
Preferred stock, (par value $10, 4% cumulative, non-participating; 7,000 shares authorized and issued)		70,000			70,000
Common stock (no par; 50,000 shares authorized; 10,000 shares issued)		70,000			70,000
Retained earnings		134,600			117,700
Total stockholders’ equity		274,600			257,700
Total liabilities and stockholders’ equity	$	588,200		$	528,200

d. Receivables turnover (beginning receivables at January 1, Year 3, were $46,000). (Round your answers to 2 decimal places.)
e. Average days to collect accounts receivable. (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.)
f. Inventory turnover (beginning inventory at January 1, Year 3, was $152,000). (Round your answers to 2 decimal places.)
g. Number of days to sell inventory. (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.)
h. Debt-to-assets ratio. (Round your answers to the nearest whole percent.)
i. Debt-to-equity ratio. (Round your answers to 2 decimal places.)
j. Number of times interest was earned. (Round your answers to 2 decimal places.)
k. Plant assets to long-term debt. (Round your answers to 2 decimal places.)
l. Net margin. (Round your answers to 2 decimal places.)
m. Turnover of assets (average total assets in Year 3 is $528,200). (Round your answers to 2 decimal places.)
n. Return on investment (average total assets in Year 3 is $528,200). (Round your answers to 2 decimal places.)
o. Return on equity (average stockholders' equity in Year 3 is $257,700). (Round your answers to 2 decimal places.)
p. Earnings per share (total shares outstanding is unchanged). (Round your answers to 2 decimal places.)
q. Book value per share of common stock. (Round your answers to 2 decimal places.)
r. Price-earnings ratio (market price per share: Year 3, $12.35; Year 4, $13.70). (Round your intermediate calculations and final answer to 2 decimal places.)
s. Dividend yield on common stock. (Round your answers to 2 decimal places.)

Revenues
RUNDLE COMPANY
Statements of Income and Retained Earnings
For the Years Ended December 31
Sales (net)
Other revenues
Total revenues
Expenses
Cost of goods sold
Selling, general, and administrative
Interest expense
Income tax expense
Total expenses
Net earnings (net income)
Retained earnings, January 1
Less: Preferred stock dividends
Common stock dividends
Retained earnings, December 31
Year 4
$350,000
10,400
360,400
175,000
67,000
11,600
83,000
336,600
23,800
117,700
2,800
4,100
$134,600
Year 3
$330,000
7,400
337,400
139,000
62,000
10,800
82,000
293,800
43,600
81,000
2,800
4,100
$117,700

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