Reference no: EM13510237

Comparative financial statements for Heritage Antiquing Services for the fiscal year ending December 31 appear on the following page. The company did not issue any new common or preferred stock during the year. A total of 700 thousand shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $1.00. The market value of the company's common stock at the end of the year was $24. All of the company's sales are on account.

Heritage Antiquing Services Comparative Balance Sheet (dollars in thousands)
	This Year			Last Year
Assets
Current assets:
Cash	$	1,120		$	1,270
Accounts receivable, net		9,600			6,800
Inventory		13,900			12,400
Prepaid expenses		740			620
Total current assets		25,360			21,090
Property and equipment:
Land		10,800			10,800
Buildings and equipment, net		39,910			40,520
Total property and equipment		50,710			51,320
Total assets	$	76,070		$	72,410
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	20,500		$	19,300
Accrued payables		980			860
Notes payable, short term		130			130
Total current liabilities		21,610			20,290
Long-term liabilities:
Bonds payable		9,500			9,500
Total liabilities		31,110			29,790
Stockholders' equity:
Preferred stock		1,000			1,000
Common stock		700			700
Additional paid-in capital		4,000			4,000
Total paid-in capital		5,700			5,700
Retained earnings		39,260			36,920
Total stockholders' equity		44,960			42,620
Total liabilities and stockholders' equity	$	76,070		$	72,410

 

Heritage Antiquing Services Comparative Income Statement and Reconciliation (dollars in thousands)
	This Year			Last Year
Sales	$	71,340		$	65,000
Cost of goods sold		47,340			35,000
Gross margin		24,000			30,000
Selling and administrative expenses:
Selling expenses		11,100			11,000
Administrative expenses		6,800			6,400
Total selling and administrative expenses		17,900			17,400
Net operating income		6,100			12,600
Interest expense		950			950
Net income before taxes		5,150			11,650
Income taxes		2,060			4,660
Net income		3,090			6,990
Dividends to preferred stockholders		50			310
Net income remaining for common stockholders		3,040			6,680
Dividends to common stockholders		700			700
Net income added to retained earnings		2,340			5,980
Retained earnings, beginning of year		36,920			30,940
Retained earnings, end of year	$	39,260		$	36,920

Required:
Compute the following financial data for short-term creditors for this year:

1. Working capital. (Enter your answer in thousands of dollars. Omit the "tiny_mce_markerquot; sign in your response.)

Working capital $

2.Current ratio. (Round your answer to 2 decimal places.)

Current ratio

3.Acid-test ratio. (Round your answer to 2 decimal places.)

Acid-test ratio

4.Accounts receivable turnover. (Round your answer to 1 decimal place.)

Accounts receivable turnover

5.Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.)

Average collection period days

6.Inventory turnover. (Round your answer to 1 decimal place.)

Inventory turnover

7.Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.)

Average sale period days