Current and Non-Current Assets Paper

Final Exam

Clarisa Santiago

ACCT/400 Version 1

August 5, 2013

Instructor Dr. Samantha T. Duhn

FINAL EXAM: ACC/400

S. Duhn

The condensed financial statements of Westward Corporation for 2006 are presented below.

Westward Corporation Westward Corporation

Balance Sheet Income Statement

December 31, 2006 For the Year Ended December 31, 2006

Assets Revenues $2,000,000

Current assets Expenses

Cash and temporary Cost of goods sold 1,080,000

investments $ 30,000 Selling and administrative

Accounts receivable 70,000 expenses 495,000

Inventories 120,000 Interest expense 30,000

Total current assets 220,000 Total expenses 1,605,000

Property, plant, and Income before income taxes 395,000

equipment (net) 780,000 Income tax expense 140,000

Total assets $1,000,000 Net income $ 255,000

Liabilities and Stockholders' Equity

Current liabilities $ 80,000

Long-term liabilities 300,000

Common stockholders' equity 620,000

Total liabilities and

stockholders' equity $1,000,000

CURRENT ASSETS | 220,000 | 2.75 |

CURRENT IABILITES | 80,000 |   |

(a) Current ratio

TOTAL LIABILITES | 380,000 | 0.38 |

TOTAL ASSETS | 1,000,000 |   |

(b) Debt to total assets

(c) Times interest earned

NET INCOME + INTEREST EXPENSE + TAX EXPENSE |   |

255,000 |   | 30,000 |   | 140,000 | 425,000 | 14.1 times |

30,000 | 30,000 |   |

COSTS OF GOODS SOLD | 1,080,000 | 9.8 times |

AVERAGE INVENTORY | 110,000 |   |

(d) Inventory turnover

NET INCOME |   | 255,000 | 13% |

NET SALES |   | 2,000,000 |   |

(e) Profit margin ratio

(f) Return on common stockholders' equity

NET INCOME | 255000 | 41% |

AVERAGE COMMON STOCKHOLDERS EQUITY |...