Problem: Bennis Company has the following comparative balance sheet data:
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Bennis Company
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Balance Sheet (Partial)
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December 31, 2010
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2011
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2012
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Cash
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$15,000
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$30,000
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Receivables (net)
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70,000
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60,000
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Inventories
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60,000
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50,000
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Plant Assets (net)
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200,000
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180,000
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$345,000
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$320,000
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Accounts Payable
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$50,000
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$60,000
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Mortgage Payable
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100,000
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100,000
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Common Stock, $10 par value
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140,000
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120,000
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Retained Earnings
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55,000
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40,000
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$345,000
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$320,000
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Additional information for 2011:
1). Net income was $25,000.
2). Sales on account were $410,000. Sales returns and allowances were $20,000.
3). Cost of goods sold was $198,000.
4). The allowance for doubtful accounts was $2,500 on December 31, 2011, and $2,000 on December 31, 2010.
Instructions:
Compute the following ratios at December 31, 2011. (a) Current, (b) Acid-test, (c) Receivables turnover, (d) Inventory turnover.