managerial accounting 458717

Managerial Accounting

Question Details

Praven Company

Statement of Financial Position

December 31, Year 2 and Year 1

(dollars in thousands)

Year 2 Year 1

Current assets:

Cash and marketable securities $150 $130

Accounts receivable, net 190 160

Inventory 170 180

Prepaid expenses 50 40

Total current assets 560 510

Noncurrent assets:

Plant & equipment, net 1,420 1,330

Total assets $1,980 $1,840

Current Liabilities:

Accounts payable $110 $100

Accrued liabilities 90 60

Notes payable, short term 260 260

Total current liabilities 460 420

Noncurrent liabilities:

Bonds payable 400 400

Total liabilities 860 820

Stockholder’s equity:

Preferred stock, $5 par, 15% 120 120

Common stock, $10 par 240 240

Additional paid-in-capital-common stock 210 210

Retained earnings 550 450

Total stockholders’ equity 1,120 1,020

Total liabilities & stockholders’ equity $1,980 $1,840

Praven Company

Income Statement

For the Year Ended December 31, Year 2

(dollars in thousands)

Sales (all on account) $1,700

Cost of goods sold 1,190

Gross Margin 510

Selling and administrative expense 200

Net operating income 310

Interest expense 40

Net income before taxes 270

Income taxes (30%) 81

Net income $189

Dividends during Year 2 totaled $89 thousand, of which $18 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $130.

Required:

Compute the following for Year 2:

1. Book value per share

2. Working capital

3. Current ratio

4. Acid-test ratio

5. Accounts receivable turnover

6. Average collection period

7. Inventory turnover

8. Average sale period

9. Times interest earned

10. Debt-to-equity ratio