The comparative statements of Pharoah Company are presented here: Pharoah Company Income Statements For the Years Ended December 31 2020 2019 Net sales $1,898,740 $1,758,700 Cost of goods sold 1,066,740 1,014,200 Gross profit 832,000 744,500 Selling and administrative expenses 508,200 487,200 Income from operations 323,800 257,300 Other expenses and losses Interest expense 23,400 21,400 Income before income taxes 300,400 235,900 Income tax expense 93,400 74,400 Net income $207,000 $161,500 Pharoah Company Balance Sheets December 31 Assets 2020 2019 Current assets Cash $60,100 $64,200 Debt investments (short-term) 74,000 50,000 Accounts receivable 126,000 111,000 Inventory 127,400 116,900 Total current assets 387,500 342,100 Plant assets (net) 663,000 534,300 Total assets $1,050,500 $876,400 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $168,200 $153,600 Income taxes payable 44,900 43,400 Total current liabilities 213,100 197,000 Bonds payable 234,000 214,000 Total liabilities 447,100 411,000 Stockholders’ equity Common stock ($5 par) 290,000 300,000 Retained earnings 313,400 165,400 Total stockholders’ equity 603,400 465,400 Total liabilities and stockholders’ equity $1,050,500 $876,400 All sales were on account. Net cash provided by operating activities for 2020 was $243,000. Capital expenditures were $137,000, and cash dividends were $59,000. Compute the following ratios for 2020. (Round free cash flow to 0 decimal places, e.g. 5,275 and all other answers to 2 decimal places, e.g. 1.83 or 1.83%. Use 365 days for calculation.) (a) Earnings per share $enter a dollar amount rounded to 2 decimal places (b) Return on common stockholders’ equity enter percentages rounded to 2 decimal places % (c) Return on assets enter percentages rounded to 2 decimal places

The comparative statements of Pharoah Company are presented here: Pharoah Company Income Statements For the Years Ended December 31 2020 2019 Net sales $1,898,740 $1,758,700 Cost of goods sold 1,066,740 1,014,200 Gross profit 832,000 744,500 Selling and administrative expenses 508,200 487,200 Income from operations 323,800 257,300 Other expenses and losses Interest expense 23,400 21,400 Income before income taxes 300,400 235,900 Income tax expense 93,400 74,400 Net income $207,000 $161,500 Pharoah Company Balance Sheets December 31 Assets 2020 2019 Current assets Cash $60,100 $64,200 Debt investments (short-term) 74,000 50,000 Accounts receivable 126,000 111,000 Inventory 127,400 116,900 Total current assets 387,500 342,100 Plant assets (net) 663,000 534,300 Total assets $1,050,500 $876,400 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $168,200 $153,600 Income taxes payable 44,900 43,400 Total current liabilities 213,100 197,000 Bonds payable 234,000 214,000 Total liabilities 447,100 411,000 Stockholders’ equity Common stock ($5 par) 290,000 300,000 Retained earnings 313,400 165,400 Total stockholders’ equity 603,400 465,400 Total liabilities and stockholders’ equity $1,050,500 $876,400 All sales were on account. Net cash provided by operating activities for 2020 was $243,000. Capital expenditures were $137,000, and cash dividends were $59,000. Compute the following ratios for 2020. (Round free cash flow to 0 decimal places, e.g. 5,275 and all other answers to 2 decimal places, e.g. 1.83 or 1.83%. Use 365 days for calculation.) (a) Earnings per share $enter a dollar amount rounded to 2 decimal places (b) Return on common stockholders’ equity enter percentages rounded to 2 decimal places % (c) Return on assets enter percentages rounded to 2 decimal places

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 48E

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The comparative statements of Pharoah Company are presented here:

Pharoah Company Income Statements For the Years Ended December 31
	2020	2019
Net sales	$1,898,740	$1,758,700
Cost of goods sold	1,066,740	1,014,200
Gross profit	832,000	744,500
Selling and administrative expenses	508,200	487,200
Income from operations	323,800	257,300
Other expenses and losses
Interest expense	23,400	21,400
Income before income taxes	300,400	235,900
Income tax expense	93,400	74,400
Net income	$207,000	$161,500

Pharoah Company Balance Sheets December 31
Assets	2020	2019
Current assets
Cash	$60,100	$64,200
Debt investments (short-term)	74,000	50,000
Accounts receivable	126,000	111,000
Inventory	127,400	116,900
Total current assets	387,500	342,100
Plant assets (net)	663,000	534,300
Total assets	$1,050,500	$876,400
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$168,200	$153,600
Income taxes payable	44,900	43,400
Total current liabilities	213,100	197,000
Bonds payable	234,000	214,000
Total liabilities	447,100	411,000
Stockholders’ equity
Common stock ($5 par)	290,000	300,000
Retained earnings	313,400	165,400
Total stockholders’ equity	603,400	465,400
Total liabilities and stockholders’ equity	$1,050,500	$876,400

All sales were on account. Net cash provided by operating activities for 2020 was $243,000. Capital expenditures were $137,000, and cash dividends were $59,000.

Compute the following ratios for 2020. (Round free cash flow to 0 decimal places, e.g. 5,275 and all other answers to 2 decimal places, e.g. 1.83 or 1.83%. Use 365 days for calculation.)

(a)	Earnings per share	$enter a dollar amount rounded to 2 decimal places
(b)	Return on common stockholders’ equity	enter percentages rounded to 2 decimal places	%
(c)	Return on assets	enter percentages rounded to 2 decimal places	%
(d)	Current ratio	enter Current ratio rounded to 2 decimal places	:1
(e)	Accounts receivable turnover	enter Accounts receivable turnover in times rounded to 2 decimal places	times
(f)	Average collection period	enter Average collection period in days rounded to 2 decimal places	days
(g)	Inventory turnover	enter Inventory turnover in times rounded to 2 decimal places	times
(h)	Days in inventory	enter Days in inventory rounded to 2 decimal places	days
(i)	Times interest earned	enter Times interest earned rounded to 2 decimal places	times
(j)	Asset turnover	enter Asset turnover in times rounded to 2 decimal places	times
(k)	Debt to assets ratio	enter percentages rounded to 2 decimal places	%
(l)	Free cash flow	$enter a dollar amount rounded to 0 decimal places

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