FINANCIAL ACCOUNTING-
The following relates to the operations of EK-CUSSA, Inc. (a computer retail company) in 2015, sold 10,000 units of its product at an average price of $450 per unit. The company reported estimated returns and allowances in 2015 of $200,000 (assumed to be part of ending inventory). EK-CUSSA actually purchased 11,000 units of its product from its manufacturer in 2015 at an average cost of $300 per unit. EK-CUSSA began 2015 with 900 units of its product in inventory (carried at an average cost of $300 per unit). Operating expenses for EK¬CUSSA, Inc. in 2015 were as follows: Advertising expenses 68,000; Repairs and maintenance costs 22,000; Lease payments 52,000; Management salaries 240,000; R&D expenditures 35,000; and Depreciation expense $85,000. EK-CUSSA, Inc had $300,000 in debt outstanding throughout all of 2015. This debt carried an average interest rate of 10 percent but 40% of the interest had not been paid at the close of the year. This had not been paid at the end of the year. Finally, EK-CUSSA's tax rate was 40 percent. Dividend paid was 50,000.
The following table also relates to balances on accounts of EK-CUSSA Inc at the end of the year 2015.
|
Accounts payable
|
39000
|
|
Accrued expenses
|
8000
|
|
Accumulated depreciation
|
51000
|
|
Additional paid-in capital
|
86000
|
|
Allowance for doubtful accounts
|
2000
|
|
Cash and equivalents
|
94100
|
|
Common stock ($0.20 par)
|
45000
|
|
Gross accounts receivable
|
40000
|
|
Gross fixed assets
|
886000
|
|
Inventories
|
65000
|
|
Retained earnings (1 JAN., 2015)
|
138000
|
|
Short-term bank loan (notes payable)
|
18000
|
EK-CUSSA's fiscal year runs from January 1 through December 31. With the information above, you are required to construct EK-CUSSA's 2015
1. Income statement using the single-step method
2. Balance sheet
3. Compute the current ratio, quick ratio and debt ratio
4. Show all calculations.