4.Financial statement construction via ratios.Incomplete financial statements of Lock Box, Inc., are presented below.
| LOCK BOX, INC. Income Statement For the Year Ended December 31, 19X3 | |
| Sales | $ ? |
| Cost of goods sold | ? |
| Gross profit | $15,000,000 |
| Operating expenses & interest | ? |
| Income before tax | $ ? |
| Income taxes, 40% | ? |
| Net income | $ ? |
| LOCK BOX, INC. Balance Sheet December 31, 19X3 | |
| Assets | |
| Cash Accounts receivable Inventory Property, plant, &. equipment Total assets | $ ? ? ? 8,000,000 $24,000,000 |
| Liabilities & Stockholders’ Equity | |
| Accounts payable Notes payable (short-term) Bonds payable Common stock Retained earnings Total liabilities & stockholders’ equity | $ ? 600,000 4,600,000 2,000,000 ? $24,000,000 |
Further information:
1. Cost of goods sold is 60% of sales. All sales are on account.
2. The company’s beginning inventory is $5 million; inventory turnover is 4.
3. The debt to total assets ratio is 70%.
4. The profit margin on sales is 6%.
5. The firm’s accounts receivable turnover is 5. Receivables increased by $400,000 during the year.
Instructions:
Using the preceding data, complete the income statement and the balance sheet.
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