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The condensed financial statements of Blossom Company for the years 2019 and 2020 are presented below. BLOSSOM COMPANY Balance Sheets December 31 (in thousands) 2020 2019 Current assets Cash and cash equivalents $330 $360 Accounts receivable (net) 630 560 Inventory 580 510 Prepaid expenses 130 160 Total current assets 1,670 1590 Property, plant, and equipment (net) 410 380 Investments 170 170 530 510 Intangibles and other assets $2,780 $2,650 Total assets $980 $950 Current liabilities Long-term liabilities 600 500 Stockholders' equity-common 1,200 1,200 Total liabilities and stockholders equity $2780 $2,650 BLOSSOM COMPANY Income Statements For the Year Ended December 31 (in thousands) 2019 2020 $3,920 $3,580 Sales revenue Costs and expenses Cost of goods sold 1,130 1050 Selling & administrative expenses 2400 2,330 Interest expense 10 20 Total costs and expenses 3,540 3400 Income before income taxes 380 180 Income tax expense 152 72 $228 $108 Net income Compute the following ratios for 2020 and 2019. (Round current ratio and inventory turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 12.6%.) (a) Current ratio. Inventory turnover. (Inventory on December 31, 2018, was $440.) (b) (c) Profit margin Return on assets. (Assets on December 31, 2018, were $2,180.) (d) Return on common stockholders' equity. (Equity on December 31, 2018, was $930.) (e) (f) Debt to assets ratio. Times interest earned (g) 2020 2019 (a) Current ratio 1 1 1.71 1.68 (b) Inventory turnover. (c) Profit margin. (d) Return on assets. (e) Return on common stockholders' equity (f) Debt to assets ratio. (g) Times interest earned times times

The condensed financial statements of Blossom Company for the years 2019 and 2020 are presented below. BLOSSOM COMPANY Balance Sheets December 31 (in thousands) 2020 2019 Current assets Cash and cash equivalents $330 $360 Accounts receivable (net) 630 560 Inventory 580 510 Prepaid expenses 130 160 Total current assets 1,670 1590 Property, plant, and equipment (net) 410 380 Investments 170 170 530 510 Intangibles and other assets $2,780 $2,650 Total assets $980 $950 Current liabilities Long-term liabilities 600 500 Stockholders' equity-common 1,200 1,200 Total liabilities and stockholders equity $2780 $2,650 BLOSSOM COMPANY Income Statements For the Year Ended December 31 (in thousands) 2019 2020 $3,920 $3,580 Sales revenue Costs and expenses Cost of goods sold 1,130 1050 Selling & administrative expenses 2400 2,330 Interest expense 10 20 Total costs and expenses 3,540 3400 Income before income taxes 380 180 Income tax expense 152 72 $228 $108 Net income Compute the following ratios for 2020 and 2019. (Round current ratio and inventory turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 12.6%.) (a) Current ratio. Inventory turnover. (Inventory on December 31, 2018, was $440.) (b) (c) Profit margin Return on assets. (Assets on December 31, 2018, were $2,180.) (d) Return on common stockholders' equity. (Equity on December 31, 2018, was $930.) (e) (f) Debt to assets ratio. Times interest earned (g) 2020 2019 (a) Current ratio 1 1 1.71 1.68 (b) Inventory turnover. (c) Profit margin. (d) Return on assets. (e) Return on common stockholders' equity (f) Debt to assets ratio. (g) Times interest earned times times

Cornerstones of Financial Accounting
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 103.1C: Leverage Cook Corporation issued financial statements at December 31, 2019, that include the...
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The condensed financial statements of Blossom Company for the years 2019 and 2020 are presented below. BLOSSOM COMPANY Balance Sheets December 31 (in thousands) 2020 2019 Current assets Cash and cash equivalents $330 $360 Accounts receivable (net) 630 560 Inventory 580 510 Prepaid expenses 130 160 Total current assets 1,670 1590 Property, plant, and equipment (net) 410 380 Investments 170 170 530 510 Intangibles and other assets $2,780 $2,650 Total assets $980 $950 Current liabilities Long-term liabilities 600 500 Stockholders' equity-common 1,200 1,200 Total liabilities and stockholders equity $2780 $2,650 BLOSSOM COMPANY Income Statements For the Year Ended December 31 (in thousands) 2019 2020 $3,920 $3,580 Sales revenue Costs and expenses Cost of goods sold 1,130 1050 Selling & administrative expenses 2400 2,330 Interest expense 10 20 Total costs and expenses 3,540 3400 Income before income taxes 380 180 Income tax expense 152 72 $228 $108 Net income
Transcribed Image Text:The condensed financial statements of Blossom Company for the years 2019 and 2020 are presented below. BLOSSOM COMPANY Balance Sheets December 31 (in thousands) 2020 2019 Current assets Cash and cash equivalents $330 $360 Accounts receivable (net) 630 560 Inventory 580 510 Prepaid expenses 130 160 Total current assets 1,670 1590 Property, plant, and equipment (net) 410 380 Investments 170 170 530 510 Intangibles and other assets $2,780 $2,650 Total assets $980 $950 Current liabilities Long-term liabilities 600 500 Stockholders' equity-common 1,200 1,200 Total liabilities and stockholders equity $2780 $2,650 BLOSSOM COMPANY Income Statements For the Year Ended December 31 (in thousands) 2019 2020 $3,920 $3,580 Sales revenue Costs and expenses Cost of goods sold 1,130 1050 Selling & administrative expenses 2400 2,330 Interest expense 10 20 Total costs and expenses 3,540 3400 Income before income taxes 380 180 Income tax expense 152 72 $228 $108 Net income
Compute the following ratios for 2020 and 2019. (Round current ratio and inventory turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 12.6%.) (a) Current ratio. Inventory turnover. (Inventory on December 31, 2018, was $440.) (b) (c) Profit margin Return on assets. (Assets on December 31, 2018, were $2,180.) (d) Return on common stockholders' equity. (Equity on December 31, 2018, was $930.) (e) (f) Debt to assets ratio. Times interest earned (g) 2020 2019 (a) Current ratio 1 1 1.71 1.68 (b) Inventory turnover. (c) Profit margin. (d) Return on assets. (e) Return on common stockholders' equity (f) Debt to assets ratio. (g) Times interest earned times times
Transcribed Image Text:Compute the following ratios for 2020 and 2019. (Round current ratio and inventory turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 12.6%.) (a) Current ratio. Inventory turnover. (Inventory on December 31, 2018, was $440.) (b) (c) Profit margin Return on assets. (Assets on December 31, 2018, were $2,180.) (d) Return on common stockholders' equity. (Equity on December 31, 2018, was $930.) (e) (f) Debt to assets ratio. Times interest earned (g) 2020 2019 (a) Current ratio 1 1 1.71 1.68 (b) Inventory turnover. (c) Profit margin. (d) Return on assets. (e) Return on common stockholders' equity (f) Debt to assets ratio. (g) Times interest earned times times
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