Problem 9-23Ratio analysisRequiredUse the financial statements for Bernard Company from Problem 9-22 to calculate the following for 2012 and 2011.a. Working capitalb. Current ratioc. Quick ratiod. Accounts receivable turnover (beginning receivables at January 1 2011 were $47000)e. Average number of days to collect accounts receivablef. Inventory turnover (beginning inventory at January 1 2011 was $140000) (Edmonds. Survey of Accounting. 2012)g. Average number of days to sell inventoryh. Debt to assets ratioi. Debt to equity ratioj. Times interest earnedk. Plant assets to long-term debtl. Net marginm. Asset turnovern. Return on investmento. Return on equityp. Earnings per shareq. Book value per share of common stockr. Price-earnings ratio (market price per share: 2011 $11.75; 2012 $12.50)s. Dividend yield on common stockProblem 10-23Service versus manufacturing companiesGoree Company began operations on January 1 2011 by issuing common stock for $30000 cash. During 2011 Goree received $40000 cash from revenue and incurred costs that required $60000 of cash payments.RequiredPrepare an income statement balance sheet and statement of cash flows for Goree Company for 2011 under each of the following independent scenarios. (Edmonds. Survey of Accounting. 2012)a. Goree is a promoter of rock concerts. The $60000 was paid to provide a rock concert that produced the revenue.a.a.b. Goree is in the car rental business. The $60000 was paid to purchase automobiles. The automobiles were purchased on January 1 2011 had four-year useful lives and no expected salvage value. Goree uses straight-line depreciation. The revenue was generated by leasing the automobiles.a.a.c. Goree is a manufacturing company. The $60000 was paid to purchase the following items.a.a.(1 Paid $8000 cash to purchase materials that were used to make products during the year.a.a.(2 Paid $20000 cash for wages of factory workers who made products during the year.a.a.(3 Paid $2000 cash for salaries of sales and administrative employees.a.a.(4 Paid $30000 cash to purchase manufacturing equipment. The equipment was used solely to make products. It had a three-year life and a $6000 salvage value. The company uses straight-line depreciation.a.a.(5 During 2011 Goree started and completed 2000 units of product. The revenue was earned when Goree sold 1500 units of product to its customers.a.a.d. Refer to Requirementc. Could Goree determine the actual cost of making the 90th unit of product? How likely is it that the actual cost of the 90th unit of product was exactly the same as the cost of producing the 408th unit of product? Explain why management may be more interested in average cost than in actual cost. (Edmonds. Survey of Accounting. 2012)
