Sales on account were 388000 sales returns and allowances


Question - Kinder Company has these comparative balance sheet data:

KINDER COMPANY Balance Sheets December 31


2014

2013

Cash

$ 34,110

$ 68,220

Accounts receivable (net)

159,180

136,440

Inventory

136,440

113,700

Plant assets (net)

454,800

409,320


$784,530

$727,680

Accounts payable

$ 113,700

$ 136,440

Mortgage payable (15%)

227,400

227,400

Common stock, $10 par

318,360

272,880

Retained earnings

125,070

90,960


$784,530

$727,680

Additional information for 2014:

1. Net income was $26,300.

2. Sales on account were $388,000. Sales returns and allowances amounted to $28,500.

3. Cost of goods sold was $208,000.

4. Net cash provided by operating activities was $59,000.

5. Capital expenditures were $28,000, and cash dividends were $18,700.

Compute the following ratios at December 31, 2014.

(a) Current ratio.

(b) Accounts receivable turnover.

(c) Average collection period.

(d) Inventory turnover.

(e) Days in inventory.

(f) Cash debt coverage ratio.

(g) Current cash debt coverage ratio.

(h) Free cash flow.

Solution Preview :

Prepared by a verified Expert
Accounting Basics: Sales on account were 388000 sales returns and allowances
Reference No:- TGS02495095

Now Priced at $30 (50% Discount)

Recommended (93%)

Rated (4.5/5)