Question : 104. Brigman Inc. has the following financial statement information for 2012 : 1291637

 

104. Brigman Inc. has the following financial statement information for 2012 and 2011: 

Balance Sheet Information:

2012

 

2011

Assets:

 

 

 

Cash

$ 10,250

 

$  51,210

Accounts receivable

7,500

 

8,325

Inventory

    1,750

 

     1,665

Total current assets

$ 19,500

 

$  61,200

 

 

 

 

Property and Equipment (net)

  60,000

 

   45,000

Total assets

$ 79,500

 

$106,200

 

 

 

 

Liabilities:

 

 

 

Accounts payable

$  4,500

 

$  1,500

Salaries payable

    1,500

 

       500

Total current liabilities

$  6,000

 

$  2,000

Notes payable

   12,500

 

   18,000

Total liabilities

$ 18,500

 

$ 20,000

 

 

 

 

Stockholders’ Equity:

 

 

 

Common stock

$ 40,000

 

$ 40,000

Retained earnings

    21,000

 

   46,200

Total stockholders’ equity

$ 61,000

 

$ 86,000

Total liabilities and stockholders’ equity

$ 79,500

 

$106,200

 

 

 

 

Income Statement Information:

 

 

 

Net sales

$ 50,000

 

$ 55,500

Cost of goods sold

   17,500

 

   16,650

Gross profit

$ 32,500

 

$ 38,850

Selling and administrative expenses

5,000

 

5,550

Interest expense

    1,250

 

    1,800

Income before income taxes

$ 26,250

 

$ 31,500

Income tax expense

    5,250

 

    6,300

Net income

$ 21,000

 

$ 25,200

 

 

 

 

Other Information:

 

 

 

Number of common shares outstanding

4,000

 

4,000

Dividends paid

$  0

 

$  0

Market price per share (12/31)

$40

 

$30

Income tax rate

20%

 

20%

 

 

 

 

Required: Compute the following ratios for the year ending December 31, 2012: (round to two decimal places) 

A.

Current ratio

 

 

B.

Quick (or acid-test) ratio

 

 

C.

Accounts receivable turnover

 

 

D.

Debt-to-equity ratio

 

 

E.

Times interest earned ratio

 

 

 

 

 

105. Brigman Inc. has the following financial statement information for 2012 and 2011: 

Balance Sheet Information:

2012

 

2011

Assets:

 

 

 

Cash

$ 10,250

 

$  51,210

Accounts receivable

7,500

 

8,325

Inventory

    1,750

 

     1,665

Total current assets

$ 19,500

 

$  61,200

 

 

 

 

Property and Equipment (net)

  60,000

 

   45,000

Total assets

$ 79,500

 

$106,200

 

 

 

 

Liabilities:

 

 

 

Accounts payable

$  4,500

 

$  1,500

Salaries payable

    1,500

 

       500

Total current liabilities

$  6,000

 

$  2,000

Notes payable

   12,500

 

   18,000

Total liabilities

$ 18,500

 

$ 20,000

 

 

 

 

Stockholders’ Equity:

 

 

 

Common stock

$ 40,000

 

$ 40,000

Retained earnings

    21,000

 

   46,200

Total stockholders’ equity

$ 61,000

 

$ 86,000

Total liabilities and stockholders’ equity

$ 79,500

 

$106,200

 

 

 

 

Income Statement Information:

 

 

 

Net sales

$ 50,000

 

$ 55,500

Cost of goods sold

   17,500

 

   16,650

Gross profit

$ 32,500

 

$ 38,850

Selling and administrative expenses

5,000

 

5,550

Interest expense

    1,250

 

    1,800

Income before income taxes

$ 26,250

 

$ 31,500

Income tax expense

    5,250

 

    6,300

Net income

$ 21,000

 

$ 25,200

 

 

 

 

Other Information:

 

 

 

Number of common shares outstanding

4,000

 

4,000

Dividends paid

$  0

 

$  0

Market price per share (12/31)

$40

 

$30

Income tax rate

20%

 

20%

 

 

 

 

Required: Compute the following ratios for the year ending December 31, 2012: (round to two decimal places) 

A.

Inventory turnover

 

 

B.

Return on assets (ROA) ratio

 

 

C.

Asset turnover ratio

 

 

D.

Earnings per share (EPS)

 

 

E.

Price earnings (P/E) ratio

 

 

 

 

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