The comparative financial statements of Blige Inc. are as follows. The market price of Blige...
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Accounting
The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $61 on December 31, 2014.
Blige Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 2014 and 2013
2014
2013
Retained earnings, January 1
$2,229,375
$1,895,825
Add net income for year
476,000
388,300
Total
$2,705,375
$2,284,125
Deduct dividends
On preferred stock
$6,300
$6,300
On common stock
48,450
48,450
Total
$54,750
$54,750
Retained earnings, December 31
$2,650,625
$2,229,375
Blige Inc.
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013
2014
2013
Sales
$3,037,310
$2,794,300
Sales returns and allowances
15,110
9,820
Net sales
$3,022,200
$2,784,480
Cost of goods sold
1,121,280
1,031,580
Gross profit
$1,900,920
$1,752,900
Selling expenses
$658,730
$785,840
Administrative expenses
561,140
461,530
Total operating expenses
1,219,870
1,247,370
Income from operations
$681,050
$505,530
Other income
35,850
32,270
$716,900
$537,800
Other expense (interest)
176,000
96,800
Income before income tax
$540,900
$441,000
Income tax expense
64,900
52,700
Net income
$476,000
$388,300
Blige Inc.
Comparative Balance Sheet
December 31, 2014 and 2013
Dec. 31, 2014
Dec. 31, 2013
Assets
Current assets
Cash
$426,610
$459,630
Temporary investments
645,680
761,670
Accounts receivable (net)
518,300
489,100
Inventories
394,200
306,600
Prepaid expenses
80,710
91,930
Total current assets
$2,065,500
$2,108,930
Long-term investments
1,353,625
262,802
Property, plant, and equipment (net)
3,080,000
2,772,000
Total assets
$6,499,125
$5,143,732
Liabilities
Current liabilities
$688,500
$744,357
Long-term liabilities
Mortgage note payable, 8%, due 2019
$990,000
$0
Bonds payable, 8%, due 2015
1,210,000
1,210,000
Total long-term liabilities
$2,200,000
$1,210,000
Total liabilities
$2,888,500
$1,954,357
Stockholders' Equity
Preferred $0.70 stock, $50 par
$450,000
$450,000
Common stock, $10 par
510,000
510,000
Retained earnings
2,650,625
2,229,375
Total stockholders' equity
$3,610,625
$3,189,375
Total liabilities and stockholders' equity
$6,499,125
$5,143,732
Required:
Determine the following measures for 2014, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.
1. Working capital
$_
2. Current ratio
_
3. Quick ratio
_
4. Accounts receivable turnover
_
5. Number of days' sales in receivables
_
days
6. Inventory turnover
_
7. Number of days' sales in inventory
_
days
8. Ratio of fixed assets to long-term liabilities
_
9. Ratio of liabilities to stockholders' equity
_
10. Number of times interest charges are earned
_
11. Number of times preferred dividends are earned
_
12. Ratio of net sales to assets
_
13. Rate earned on total assets
_
%
14. Rate earned on stockholders' equity
_
%
15. Rate earned on common stockholders' equity
_
%
16. Earnings per share on common stock
$ _
17. Price-earnings ratio
_
18. Dividends per share of common stock
$ _
19. Dividend yield
_
%
Answer & Explanation
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