The average sale period. (The inventory at the beginning of last year totaled$1,920,000.) f. The operating cycle. g. The total asset turnover. (The total assets at the beginning of last year totaled$12,960,000.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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e. The average sale period. (The inventory at the beginning of last year totaled$1,920,000.)

f. The operating cycle.

g. The total asset turnover. (The total assets at the beginning of last year totaled$12,960,000.)

Assets
Current assets:
Cash
Marketable securities
Accounts receivable, net
Inventory
Prepaid expenses
Lydex Company
Comparative Balance Sheet
Total current assets
Plant and equipment, net
Total assets
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities
Note payable, 10%
Total liabilities
Stockholders' equity:
Common stock, $78 par value
Retained earnings
This Year
$ 960,000
$ 1,260,000
300,000
2,700,000
1,800,000
3,900,000
2,400,000
240,000
180,000
7,800,000 5,940,000
9,300,000
8,940,000
$17,100,000 $14,880,000
0
$ 3,900,000
3,600,000
7,500,000
Last Year
7,800,000
1,800,000
Total stockholders' equity
9,600,000
Total liabilities and stockholders' equity $17,100,000
$ 2,760,000
3,000,000
5,760,000
7,800,000
1,320,000
9,120,000
$14,880,000
Transcribed Image Text:Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Lydex Company Comparative Balance Sheet Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 10% Total liabilities Stockholders' equity: Common stock, $78 par value Retained earnings This Year $ 960,000 $ 1,260,000 300,000 2,700,000 1,800,000 3,900,000 2,400,000 240,000 180,000 7,800,000 5,940,000 9,300,000 8,940,000 $17,100,000 $14,880,000 0 $ 3,900,000 3,600,000 7,500,000 Last Year 7,800,000 1,800,000 Total stockholders' equity 9,600,000 Total liabilities and stockholders' equity $17,100,000 $ 2,760,000 3,000,000 5,760,000 7,800,000 1,320,000 9,120,000 $14,880,000
Lydex Company
Comparative Income Statement and Reconciliation
Sales (all on account)
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Interest expense
Net income before taxes
Income taxes (30%)
Net income
Common dividends
Net income retained
Beginning retained earnings
Ending retained earnings
This Year Last Year
$15,750,000 $12,480,000
12,600,000 9,900,000
3,150,000 2,580,000
1,590,000
1,560,000
1,560,000
1,020,000
360,000
300,000
1,200,000
720,000
360,000
216,000
840,000
504,000
360,000
252,000
480,000
252,000
1,320,000 1,068,000
$1,800,000 $1,320,000
To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's
industry:
Current ratio
Acid-test ratio
Average collection period
Average sale period
Return on assets
Debt-to-equity ratio
Times interest earned ratio
Price-earnings ratio
2.3
1.2
30 days
60 days
9.5%
0.65
5.7
10
Transcribed Image Text:Lydex Company Comparative Income Statement and Reconciliation Sales (all on account) Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income Common dividends Net income retained Beginning retained earnings Ending retained earnings This Year Last Year $15,750,000 $12,480,000 12,600,000 9,900,000 3,150,000 2,580,000 1,590,000 1,560,000 1,560,000 1,020,000 360,000 300,000 1,200,000 720,000 360,000 216,000 840,000 504,000 360,000 252,000 480,000 252,000 1,320,000 1,068,000 $1,800,000 $1,320,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Times interest earned ratio Price-earnings ratio 2.3 1.2 30 days 60 days 9.5% 0.65 5.7 10
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