ACC 205 week 5 #6 Ratio computation

6. Ratio computation. The financial statements of the Lone Pine Company follow.

LONE PINE COMPANY

Comparative Balance Sheets

December 31, 20X2 and 20X1 ($000 Omitted)

20X2

20X1

Assets

Current Assets

Cash and Short-Term Investments

$400

$600

Accounts Receivable (net)

3,000

2,400

Inventories

3,000

2,300

Total Current Assets

$6,400

$5,300

Property, Plant, and Equipment

Land

$1,700

$500

Buildings and Equipment (net)

1,500

1,000

Total Property, Plant, and Equipment

$3,200

$1,500

Total Assets

$9,600

$6,800

Liabilities and Stockholders’ Equity

Current Liabilities

Accounts Payable

$2,800

$1,700

Notes Payable

1,100

1,900

Total Current Liabilities

$3,900

$3,600

Long-Term Liabilities

Bonds Payable

4,100

2,100

Total Liabilities

$8,000

$5,700

Stockholders’ Equity

Common Stock

$200

$200

Retained Earnings

1,400

900

Total Stockholders’ Equity

$1,600

$1,100

   Total Liabilities and Stockholders’ Equity

$9,600

$6,800

LONE PINE COMPANY

Statement of Income and Retained Earnings

For the Year Ending December 31,20X2 ($000 Omitted)

Net Sales*

$36,000

Less: Cost of Goods Sold

$20,000

Selling Expense

6,000

Administrative Expense

4,000

Interest Expense

400

Income Tax Expense

2,000

32,400

Net Income

$3,600

Retained Earnings, Jan. 1

     900

Ending Retained Earnings

$4,500

Cash Dividends Declared and Paid

  3,100

Retained Earnings, Dec. 31

$1,400

*All sales are on account.