Solution-Balance sheet for the bryan corporation

Balance sheet for the bryan corporation

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Reference no: EM13327258

Problem 1

The balance sheet for the Bryan Corporation is shown below. Sales for the year were $3,680,000, with 75 percent of sales sold on credit.

BRYAN CORPORATION Balance Sheet 201X
Assets			Liabilities and Stockholders' Equity
Cash	$	21,000	Accounts payable	$	222,000
Accounts receivable		324,000	Accrued taxes		93,000
Inventory		244,000	Bonds payable (long-term)		194,000
Plant and equipment		461,000	Common stock		100,000

			Paid-in capital		150,000
			Retained earnings		291,000

Total assets	$	1,050,000	Total liabilities and stockholders' equity	$	1,050,000

Compute the following ratios

(a) Current ratio

(b) Quick ratio

(c) Debt-to-total-assets ratio

(d) Asset turnover

(e) Average collection period days

Problem 2

Using the income statement for J. Lo Wedding Gowns, compute the following ratios:

J. LO WEDDING GOWNS Income Statement
Sales	$	281,000
Less: Cost of goods sold		169,000

Gross profit		112,000
Less: Selling and administrative expense		44,800
Less: Lease expense		17,500

Operating profit*	$	49,700
Less: Interest expense		8,100

Earnings before taxes	$	41,600
Less: Taxes (30%)		16,640

Earnings after taxes	$	24,960

*Equals income before interest and taxes.

(a) Compute the interest coverage ratio.

(b) Compute the fixed charge coverage ratio.

Reference no: EM13327258

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Balance sheet for the bryan corporation

Reference no: EM13327258

Reference no: EM13327258

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