Compute current ratio , debt ratio and earning per share of Incorporation NBF.

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Answer 1

Question

Chapter 12, Problem 39BP

1.

To determine

Compute current ratio, debt ratio and earning per share of Incorporation NBF.

2a.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of purchasing merchandise of $38,00 on account by debiting inventory.

2b.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of issued 1,000 shares of common stock, receiving cash of $85,000.

2c.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of borrowing $50,000 on a long term notes payable.

2d.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of receiving cash on account of $9,000.

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(Learning Objective 7: Evaluate liquidity using the quick [acid-test] ratio and days’sales in receivables) Northern Products reported the following amounts in its 2019 financialstatements. The 2018 amounts are given for comparison.2019 2018Current assets:Cash............................................ $ 9,500Short-term investments................ 7,000Accounts receivable..................... $70,100Less: Allowance foruncollectibles.......................$86,500(7,500) (5,500) 64,600Inventory..................................... 190,000Prepaid insurance ........................ 2,200Total current assets..................... 273,300Total current liabilities.................... 106,000Net sales (all on account) ................$ 9,50010,50079,000189,0002,200290,20099,0001,077,000 734,000Requirements1. Compute Northern’s quick (acid-test) ratio at the end of 2019. Round to two decimalplaces. How does the quick ratio compare with the industry average of 0.92?2. Compare days’ sales…

(Learning Objective 7: Calculate return on assets) Hometown Supply Companyreported the following information in its comparative financial statements for the fiscal yearended January 31, 2018:January 31,2018January 31,2017Net sales....................................Net earnings..............................Average total assets...................$84,000$ 4,200$70,000$82,600$ 4,050$69,450Requirements1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did itimprove or worsen in 2018?2. Compute asset turnover for the years ended January 31, 2018, and 2017. Did it improve orworsen in 2018?3. Compute return on assets for the years ended January 31, 2018, and 2017. Did it improveor worsen in 2018? Which component—net profit margin ratio or asset turnover—wasmostly responsible for the change in the company’s return on assets?

(Learning Objective 7: Calculate return on assets) Handley Grocery Corporationreported the following information in its comparative financial statements for the fiscal yearended January 31, 2018:January 31,2018January 31,2017Net sales....................................Net earnings..............................Average total assets...................$50,000$ 2,200$40,000$48,350$ 2,100$39,300Requirements1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did itimprove or worsen in 2018?2. Compute asset turnover for the years ended January 31, 2018, and 2017. Did it improve orworsen in 2018?3. Compute return on assets for the years ended January 31, 2018, and 2017. Did it improveor worsen in 2018? Which component—net profit margin ratio or asset turnover—wasmostly responsible for the change in the company’s return on assets?

Answer 2

Question

Chapter 12, Problem 39BP

1.

To determine

Compute current ratio, debt ratio and earning per share of Incorporation NBF.

2a.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of purchasing merchandise of $38,00 on account by debiting inventory.

2b.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of issued 1,000 shares of common stock, receiving cash of $85,000.

2c.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of borrowing $50,000 on a long term notes payable.

2d.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of receiving cash on account of $9,000.

Expert Solution & Answer

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Answer 3

Question

Chapter 12, Problem 39BP

1.

To determine

Compute current ratio, debt ratio and earning per share of Incorporation NBF.

2a.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of purchasing merchandise of $38,00 on account by debiting inventory.

2b.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of issued 1,000 shares of common stock, receiving cash of $85,000.

2c.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of borrowing $50,000 on a long term notes payable.

2d.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of receiving cash on account of $9,000.

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 39BP

1.

To determine

Compute current ratio, debt ratio and earning per share of Incorporation NBF.

2a.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of purchasing merchandise of $38,00 on account by debiting inventory.

2b.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of issued 1,000 shares of common stock, receiving cash of $85,000.

2c.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of borrowing $50,000 on a long term notes payable.

2d.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of receiving cash on account of $9,000.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 39BP

1.

To determine

Compute current ratio, debt ratio and earning per share of Incorporation NBF.

2a.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of purchasing merchandise of $38,00 on account by debiting inventory.

2b.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of issued 1,000 shares of common stock, receiving cash of $85,000.

2c.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of borrowing $50,000 on a long term notes payable.

2d.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of receiving cash on account of $9,000.

Answer 6

Chapter 12, Problem 39BP

1.

To determine

Compute current ratio, debt ratio and earning per share of Incorporation NBF.

Answer 7

Chapter 12, Problem 39BP

1.

To determine

Compute current ratio, debt ratio and earning per share of Incorporation NBF.

Answer 8

2a.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of purchasing merchandise of $38,00 on account by debiting inventory.

Answer 9

2a.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of purchasing merchandise of $38,00 on account by debiting inventory.

Answer 10

2b.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of issued 1,000 shares of common stock, receiving cash of $85,000.

Answer 11

2b.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of issued 1,000 shares of common stock, receiving cash of $85,000.

Answer 12

2c.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of borrowing $50,000 on a long term notes payable.

Answer 13

2c.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of borrowing $50,000 on a long term notes payable.

Answer 14

2d.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of receiving cash on account of $9,000.

Answer 15

2d.

To determine

Compute each of the same three ratios after, evaluating the effect of transaction of receiving cash on account of $9,000.

Answer 16

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Answer 17

Expert Solution & Answer

Answer 18

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Answer 19

Ch. 12 - Prob. 1DQ Ch. 12 - Which amount is the base amount for vertical...Ch. 12 - Prob. 3DQ Ch. 12 - Prob. 4DQ Ch. 12 - Prob. 5DQ Ch. 12 - Prob. 6DQ Ch. 12 - Prob. 7DQ Ch. 12 - How would you expect a recession to affect asset...Ch. 12 - Prob. 9DQ Ch. 12 - Prob. 10DQ

Compute current ratio , debt ratio and earning per share of Incorporation NBF.

Solution Summary: The author calculates current ratio, debt ratio and earning per share of Incorporation NBF.

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Compute current ratio, debt ratio and earning per share of Incorporation NBF.

Compute each of the same three ratios after, evaluating the effect of transaction of purchasing merchandise of $38,00 on account by debiting inventory.

Compute each of the same three ratios after, evaluating the effect of transaction of issued 1,000 shares of common stock, receiving cash of $85,000.

Compute each of the same three ratios after, evaluating the effect of transaction of borrowing $50,000 on a long term notes payable.

Compute each of the same three ratios after, evaluating the effect of transaction of receiving cash on account of $9,000.

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Chapter 12 Solutions