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    Neale Corporation Financial Statement

    Uploaded by

    kerry
    The document provides financial statements for Neale Corporation and Tavis Corporation. For Neale Corporation, the balance sheet shows current assets of $205,000 and current liabilities of $125,000 for the current year. Several financial ratios are then calculated from the information provided, including the current ratio of 1.6 and acid-test ratio of 0.9. For Tavis Corporation, the income statement shows net income of $18,000 for the year ended December 31, 2015. Financial ratios are then calculated, such as return on sales of 0.09%, return on assets of 13.2%, and return on equity of 15.2%.

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    Neale Corporation Financial Statement

    Uploaded by

    kerry
    14 views4 pages
    The document provides financial statements for Neale Corporation and Tavis Corporation. For Neale Corporation, the balance sheet shows current assets of $205,000 and current liabilities of $125,000 for the current year. Several financial ratios are then calculated from the information provided, including the current ratio of 1.6 and acid-test ratio of 0.9. For Tavis Corporation, the income statement shows net income of $18,000 for the year ended December 31, 2015. Financial ratios are then calculated, such as return on sales of 0.09%, return on assets of 13.2%, and return on equity of 15.2%.

    Original Description:

    Financial Accounting

    Original Title

    Neale Corporation

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    The document provides financial statements for Neale Corporation and Tavis Corporation. For Neale Corporation, the balance sheet shows current assets of $205,000 and current liabilities of $125,000 for the current year. Several financial ratios are then calculated from the information provided, including the current ratio of 1.6 and acid-test ratio of 0.9. For Tavis Corporation, the income statement shows net income of $18,000 for the year ended December 31, 2015. Financial ratios are then calculated, such as return on sales of 0.09%, return on assets of 13.2%, and return on equity of 15.2%.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    14 views4 pages

    Neale Corporation Financial Statement

    Uploaded by

    kerry
    The document provides financial statements for Neale Corporation and Tavis Corporation. For Neale Corporation, the balance sheet shows current assets of $205,000 and current liabilities of $125,000 for the current year. Several financial ratios are then calculated from the information provided, including the current ratio of 1.6 and acid-test ratio of 0.9. For Tavis Corporation, the income statement shows net income of $18,000 for the year ended December 31, 2015. Financial ratios are then calculated, such as return on sales of 0.09%, return on assets of 13.2%, and return on equity of 15.2%.

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    You are on page 1of 4

    3.

    Neale Corporation
    Financial Statement

    Balance Sheet: Current Year Prior Year

    Cash 20,000 22,000


    short-term Investments 30,000 26,000
    Accounts Receivable, net 64,000 73,000
    Inventory 75,000 71,000
    Prepaid Expenses 16,000 8,000
    Total Current Assets 205,000 200,000
    Total Current Liabilities 125,000 91,000

    Income Statement:

    Net Credit Sales 545,000


    Cost of Goods Sold 397,000

    a. Current Ratio = Current Assets


    Current Liabilities

    205,000 = 1.6
    125,000
    b. Acid-test Ratio = Cash + Short term Investment + Net Current Receivables
    Current Liabilities

    $20,000 + $30,000 + $64,000 = $114,000 = 0.9


    125,000 $125,000

    c. Inventory Turnover = Cost of goods Sold


    Average Inventory

    Average Inventory = Opening Inventory + Closing Inventory = $75,000 + $71,000 =


    2 2

    $146,000 = $73,000
    2

    $397,000 = 5.4 Times


    $73,000

    d. Accounts Receivable turnover= Net Sales


    Average Net Accounts Receivable

    Average Net Accounts Receivable = Opening Receivable + Closing Receivable


    2

    = $64,000 + $73,000 = $137,000 = $68,500


    2 2

    = $545,000 = 8.0 Times


    $68,000

    e. Day’s Sales in average receivables to the nearest day = Average net accounts receivables
    One day’s Sales

    = $68,500
    $545,000/ 365

    = $68,500 = 45.9
    $1,493.15
    4.

    Tavis Corporation
    Income Statement
    For the Year Ended December 31, 2015

    $
    Net Sales 194,000
    Cost of Goods Sold 93,000
    Gross Profit 101,000
    Selling and General Expense 66,000
    Income from Operations 35,000
    Interest Expense 9,000
    Income before Income Tax 26,000
    Income Tax Expense 8,000
    18,000

    Additional Data :

    Total Assets 204,000


    Common Stockholders' Equity 96,000
    Preferred Dividends 4,000

    a. Return on Sales = Net Income


    Net Sales

    = $18, 000 = 0.09%


    $194,000

    b. Return on Assets = Net Income + Interest Expense


    Average Total Assets

    = $18,000 + $9,000 * 100 = $27,000 * 100 = 13.2%


    $204,000 $204,000
    c. Return on Equity = Net Income – Preferred Dividends
    Average Common Stockholders’ Equity

    = $18,000 - $4,000 *100 = $14,000 * 100 = 15.2%


    $96,000 - $4,000 $92,000

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