-What is XYZ's current ratio on December 31, 2021?-What is XYZ's Accounts Receivables Turnover for 2021? (assume Accounts Receivable, net was $500,000 on December 31, 2020)-What is XYZ's Asset Turnover for 2021? (assume total assets were $14 million on December 31, 2020)Account Balance Data DebitCreditCash217,650 Accounts Receivable545,000 Interest Receivable1,200 Allowance for Doubtful Accounts 8,450Merchandise Inventory778,000 Prepaid Insurance30,000 Notes Receivable Land2,000,000 Office Building4,000,000 Office Equipment320,000 Store Building9,000,000 Store Equipment3,560,000 Accumulated Depreciation - office building and equipment 1,580,000Accumulated Depreciation - store building and equipment 4,126,000Goodwill700,000 A8XYZ Co.9Balance Sheet10December 31, 20211112Assets13 Current Assets:14Cash205,15015Accounts Receivable491,87016Interest Receivable1,33117Merchandise Inventory778,00018Prepaid Insurance20,00019Total Current Assets1,496,35120 Non-Current Assets:21Land2,000,0004,000,000Office BuildingOffice EquipmentAccumulated depreciation-office buildings and equip2223320,000(1,620,000)2425Store Building9,000,00026Store Equipment3,560,000(4,216,000)27Accumulated depreciation-store buildings and28Goodwill700,00029Total Long-Term Assets13,744,00030 Total Assets15,240,3513132Liabilities33 Current Liabilities:Accounts PayableIncome Tax Payable34194,30044,00090,0003536Unearned Revenue37Total Current Liabilities328,30038 Non-Current Liabilities:39Bonds Payable518,00040 Total Liabilities846,3004142Stockholders' Equity43Common Stock1,700,00044Preferred 5% Stock1,280,000Paid-In Capital in Excess of Par - Common StockPaid-In Capital in Excess of Par - Preferred StockTreasury StockPaid-In Capital - TreasuryRetained Earnings50 Total Stockholders' Equity51 Total Liabilities and Stockholders' Equity45736,80046170,00047(178,200)13,000484910,672,45114,394,05115,240,351 A.BDE8XYZ Co.Income Statement10For the year ending December 31, 20211112 Sales13 Cost of Goods SoldGross Profit5,335,0003,500,0001,835,00014enter a formula here!16 Selling Expenses:17 Sales Salaries Expense385,00018Sales Commissions185,000Advertising ExpenseMiscellaneous Selling ExpenseTotal Selling Expense19150,0002014,00021734,000enter a formula here!23 General & Administrative Expenses:24 Office Salaries ExpenseOffice Supplies ExpenseOffice Rent ExpenseInsurance ExpenseDelivery ExpenseStore Supplies ExpenseBad Debt ExpenseDepreciation Expense - Office Building and EquipmentDepreciation Expense - Store Building and EquipmentMiscellaneous Administrative ExpenseTotal General & Administrative Expense170,00010,00050,00010,00030,00021,00044,68070,0002526272829303132190,000337,5003435603,180enter a formula here!36 Income from Operations37497,820enter a formula here!38 Other Income / Expense:39 Interest Revenue40 Interest Expense30,131(32,500)41(2,369)enter a formula here!4243 Net income before income tax495,451enter a formula here!444546 Net Income after tax140,500354,951enter a formula here!

The ratio analysis helps to analyse the financial statements of the business. Current ratio =…

Answered: What is XYZ's current ratio on December…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 12SP

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Question

-What is XYZ's current ratio on December 31, 2021?

-What is XYZ's Accounts Receivables Turnover for 2021? (assume Accounts Receivable, net was $500,000 on December 31, 2020)

-What is XYZ's Asset Turnover for 2021? (assume total assets were $14 million on December 31, 2020)

Account Balance Data
	Debit	Credit
Cash	217,650
Accounts Receivable	545,000
Interest Receivable	1,200
Allowance for Doubtful Accounts		8,450
Merchandise Inventory	778,000
Prepaid Insurance	30,000
Notes Receivable
Land	2,000,000
Office Building	4,000,000
Office Equipment	320,000
Store Building	9,000,000
Store Equipment	3,560,000
Accumulated Depreciation - office building and equipment		1,580,000
Accumulated Depreciation - store building and equipment		4,126,000
Goodwill	700,000

A
8
XYZ Co.
9
Balance Sheet
10
December 31, 2021
11
12
Assets
13 Current Assets:
14
Cash
205,150
15
Accounts Receivable
491,870
16
Interest Receivable
1,331
17
Merchandise Inventory
778,000
18
Prepaid Insurance
20,000
19
Total Current Assets
1,496,351
20 Non-Current Assets:
21
Land
2,000,000
4,000,000
Office Building
Office Equipment
Accumulated depreciation-office buildings and equip
22
23
320,000
(1,620,000)
24
25
Store Building
9,000,000
26
Store Equipment
3,560,000
(4,216,000)
27
Accumulated depreciation-store buildings and
28
Goodwill
700,000
29
Total Long-Term Assets
13,744,000
30 Total Assets
15,240,351
31
32
Liabilities
33 Current Liabilities:
Accounts Payable
Income Tax Payable
34
194,300
44,000
90,000
35
36
Unearned Revenue
37
Total Current Liabilities
328,300
38 Non-Current Liabilities:
39
Bonds Payable
518,000
40 Total Liabilities
846,300
41
42
Stockholders' Equity
43
Common Stock
1,700,000
44
Preferred 5% Stock
1,280,000
Paid-In Capital in Excess of Par - Common Stock
Paid-In Capital in Excess of Par - Preferred Stock
Treasury Stock
Paid-In Capital - Treasury
Retained Earnings
50 Total Stockholders' Equity
51 Total Liabilities and Stockholders' Equity
45
736,800
46
170,000
47
(178,200)
13,000
48
49
10,672,451
14,394,051
15,240,351

A.
B
D
E
8
XYZ Co.
Income Statement
10
For the year ending December 31, 2021
11
12 Sales
13 Cost of Goods Sold
Gross Profit
5,335,000
3,500,000
1,835,000
14
enter a formula here!
16 Selling Expenses:
17 Sales Salaries Expense
385,000
18
Sales Commissions
185,000
Advertising Expense
Miscellaneous Selling Expense
Total Selling Expense
19
150,000
20
14,000
21
734,000
enter a formula here!
23 General & Administrative Expenses:
24 Office Salaries Expense
Office Supplies Expense
Office Rent Expense
Insurance Expense
Delivery Expense
Store Supplies Expense
Bad Debt Expense
Depreciation Expense - Office Building and Equipment
Depreciation Expense - Store Building and Equipment
Miscellaneous Administrative Expense
Total General & Administrative Expense
170,000
10,000
50,000
10,000
30,000
21,000
44,680
70,000
25
26
27
28
29
30
31
32
190,000
33
7,500
34
35
603,180
enter a formula here!
36 Income from Operations
37
497,820
enter a formula here!
38 Other Income / Expense:
39 Interest Revenue
40 Interest Expense
30,131
(32,500)
41
(2,369)
enter a formula here!
42
43 Net income before income tax
495,451
enter a formula here!
44
45
46 Net Income after tax
140,500
354,951
enter a formula here!

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