Q12SE Traditional Mills鈥檚 balance sh... [FREE SOLUTION]

Chapter 15: Q12SE (page 838)

Traditional Mills鈥檚 balance sheet appears as follows (amounts in thousands):
Use the following ratio data to complete Traditional Mills鈥檚 balance sheet.
Current ratio is 0.72.
2. Acid-test ratio is 0.36.

Short Answer

Expert verified

Answer

Accounts Receivables = $855, Prepaid Expense= $100, Total Current Assets= $1800, Plant Assets, Net= $2710, Long-term Note Payable =$1290, Total Liabilities=$4550, Total Liabilities and Stockholders=$7000

Step by step solution

Preparation of Balance Sheet

TRADITIONAL MILLS
Balance Sheet December 31, 2018
Assets	$	Liabilities	$
Cash	45	Total Current Liabilities	2,500
Accounts Receivables	855	Long-term Note Payable	1,290
Merchandise Inventory	800	Other Long-term Liabilities	760
Prepaid Expenses	100	Total Liabilities	4,550
Total Current Assets	1,800
Plant Assets, Net	2,710	Stockholders鈥� Equity
Other Assets	2,490	Stockholders鈥� Equity	2,450
Total Assets	7,000	Total Liabilities and Stockholders鈥� Equity	7,000

Step 2:Calculations

Total asset = Total liabilities and stockholder鈥檚 equity

Therefore, total liabilities and stockholder鈥檚 equity = $7,000

Total liabilities and stockholder鈥檚 equity = Total liabilities + Stockholder's equity

Total liabilities = $7,000 - $2450

= $4,550

Total liabilities = Total current liability + Long term note payable + Other long term liabilities

Long term notes payable =$4,550 - $2,500 - $760

= $1290

Current ratio = Current asset/ Current liabilities

Current assets = 0.72x2500

= $1,800

Total asset = Plant asset + Other asset + Total current asset

Plant asset = $7,000 - $1,800 - $2,490

=$2,710

Acid ratio = (Cash + Investment + Account receivable)/ Current liabilities

Account receivable = $2,500x0.36 - $45

Account receivable = $855

Prepaid expense = Total Current Assets 鈥� Inventory 鈥� Account Receivable - Cash

= $1800 - $800 - $855 - $45

= $100

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GARFIELD, INC Comparative Income Statement Years Ended December 31, 2018 and 2017
	2018	2017
Net sales revenue	\(461,000	\)424,000
Cost of goods sold	241,000	211,000
Gross profit	220,000	213,000
Operating expenses	137,000	135,000
Income from operations	83,000	78,000
Interest expenses	9,000	13,000
Income before taxes	74,000	65,000
Income tax expenses	18,000	24,000
Net income	\(56,000	\)41,000

GARFIELD, INC Comparative Income Statement Years Ended December 31, 2018 and 2017
	2018	2017	2016
Assets
Current assets
Cash	\(99,000	\)98,000
Accounts receivables, Net	108,000	114,000	107,000
Merchandise inventory	146,000	164,000	202,000
Prepaid expenses	20,000	9,000
Total current assets	373,000	385,000
Property, plant, and equipment	211,000	181,000
Total assets	\(584,000	\)566,000	\(602,000

Liabilities
Total current liabilities	\)227,000	\(246,000
Long-term liabilities	117,000	100,000
Total liabilities	344,000	346,000

Stockholder鈥檚 equity
Preferred stock, 3%	98,000	98,000
Common stockholder equity, no par	142,000	122,000	89,000
Total liabilities and stockholder鈥檚 equity	\)584,000	\(566,000

Cash	\(19,000
Accounts Receivable, Net	82,000
Merchandise Inventory	183,000
Total Assets	638,000
Accounts Payable	102,000
Accrued Liabilities	35,000
Short-term Notes Payable	50,000
Long-term Liabilities	221,000
Net Income	69,000
Common Shares Outstanding	50,000 shares

RANDALL DEPARTMENT STORES, INC. Income Statement Compared with Industry Average Year Ended December 31, 2018
	Randall	Industry Average
Net Sales Revenue	\( 783,000	100.0%
Cost of Goods Sold	527,742	65.8
Gross Profit	255,258	34.2
Operating Expenses	163,647	19.7
Operating Income	91,611	14.5
Other Expenses	6,264	0.4
Net Income	\) 85,347	14.1%

RANDALL DEPARTMENT STORES, INC. Balance Sheet Compared with Industry Average December 31, 2018
	Randall	Industry Average
Current Assets	\( 310,040	70.9%
Property, Plant, and Equipment, Net	119,600	23.6
Intangible Assets, Net	7,360	0.8
Other Assets	23,000	4.7
Total Assets	\) 460,000	100.0%

Current Liabilities	\( 210,680	48.1%
Long-term Liabilities	103,960	16.6
Total Liabilities	314,640	64.7
Stockholders鈥� Equity	145,360	35.3
Total Liabilities and Stockholders鈥� Equity	\) 460,000	100.0%

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Traditional Mills鈥檚 balance sheet appears as follows (amounts in thousands):
Use the following ratio data to complete Traditional Mills鈥檚 balance sheet.
Current ratio is 0.72.
2. Acid-test ratio is 0.36.

Short Answer

Step by step solution

Preparation of Balance Sheet

Step 2:Calculations

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91影视

Traditional Mills鈥檚 balance sheet appears as follows (amounts in thousands):Use the following ratio data to complete Traditional Mills鈥檚 balance sheet.Current ratio is 0.72.2. Acid-test ratio is 0.36.

Short Answer

Step by step solution

Preparation of Balance Sheet

Step 2:Calculations

One App. One Place for Learning.

Most popular questions from this chapter

Recommended explanations on Business Studies Textbooks

Strategic Direction

Business Case Studies

Business Data Analytics

Business Operations

Sales in Business

Startups

Study anywhere. Anytime. Across all devices.

Traditional Mills鈥檚 balance sheet appears as follows (amounts in thousands):
Use the following ratio data to complete Traditional Mills鈥檚 balance sheet.
Current ratio is 0.72.
2. Acid-test ratio is 0.36.