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Question(s) / Instruction(s):

*Ex. 24-62—Computation of selected ratios.
The following data is given:

December 31,

 

 

 

2004

 

2003

 

 

Cash

$ 45,000

$ 50,000

 

Accounts receivable (net)

80,000

60,000

 

Inventories

90,000

110,000

 

Plant assets (net)

400,000

325,000

 

 

 

Accounts payable

55,000

40,000

 

Wages payable

10,000

5,000

 

Bonds payable

70,000

70,000

 

10% Preferred stock, $40 par

100,000

100,000

 

Common stock, $10 par

120,000

90,000

 

Paid-in capital

80,000

65,000

 

Retained earnings

220,000

175,000

 

 

 

Net credit sales

700,000

 

Cost of goods sold

450,000

 

Net income

84,000

Instructions
Compute the following ratios:
(a)     Acid-test ratio at 12/31/04
(b)     Receivables turnover in 2004
(c)     Inventory turnover in 2004
(d)     Profit margin on sales in 2004
(e)     Rate of return on common stock equity in 2004
(f)     Book value per share of common stock at 12/31/04

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