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MANAGERIAL ACCOUNTING I. Profitability and Solvency. Following are data about Blite company: Average total...

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Accounting

MANAGERIAL ACCOUNTING
I. Profitability and Solvency. Following are data about Blite company:
Average total assets 150,000
Average owners equity 60,000
Net income after interest and before tax 10,000
Bonds payable, 8%50,000
Income tax rate 35%
Required: Calculate the following ratios.
1. Times interest earned
2. Return on equity
3. Return on assets
II. Turnover Ratios. Below are data about Lio Merchandising Company:
Sales 500,000
Cost of goods sold 200,000
Average inventory 20,000
Average receivables 30,000
Working days in a year 360 days
Required: Compute the following:
a. Inventory turnover
b. Receivables turnover
c. Collection period of accounts receivables
d. Average age of inventories
e. Operating cycle
III. Prepare a Horizontal analysis using the following information from comparative condensed
financial statements of Jampolis Corporation:
Jampolis Corporation
Statement of Income and Retained Earnings
For the Year Ending December 31
20212020
Sales 100,00097,500
Less cost of goods sold 61,25055,000
Gross margin 38,75042,500
Operating expenses (26,000)(26,250)
Interest expense (2,500)(2,250)
Income before tax 10,25014,000
Income taxes 3,5904,900
Net income after tax 6,6009,100

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