Problem 1. The following information applies to Barnhart Company:
Assets
Cash $5,000
Accounts receivable 12,000
Inventory 15,000
Plant and equipment, net of depreciation 20,000
Land 18,000
Total assets $70.000
Liabilities and Stockholders' Equity
Accounts payable $4,000
Salaries payable 9,000
Bonds payable (due 2020) 11,000
Capital stock, no par 22,000
Retained earnings 24,000
Total liabilities and stockholders' equity $70,000
Additional information:
• Net Credit Sales = $220,000
• Beginning Accounts Receivable = $10,000
Required:
1) Compute Barnhart's:
a) Quick ratio
b) Current ratio
c) Working capital
d) Accounts receivable turnover
e) Average days to collect receivables
Problem 2. The Jiffy Manufacturing Company started operations in 2012 when it acquired $100,000 from its owners. During the year, the company incurred the following costs:
Raw materials used $40,000
Labor 50,000
Overhead 20,000
Selling and administrative costs 30,000
The company placed 12,000 units into production, completed 10,000 units, and sold 8,000 units. The average selling price was $17 per unit.
Required:
1) Prepare a schedule of cost of goods manufactured and sold for the year ended December 31, 2012.
2) Prepare an income statement for the year ended December 31, 2012.