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The Following Information Is from Omega Corporation's Balance Sheets as of December

Question 158

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The following information is from Omega Corporation's balance sheets as of December 31,2010 and 2011 and its income statement for 2011:
20112010 Assets:  Cash $18,000$22,000 Marketable securities 25,0000 Accounts receivable 38,00042,000 Inventory 61,00052,000 Prepaid insurance 6,0009,000 Long-term investments 49,00020,000 Plant assets, net 218,000225,000 Total assets $415,000$370,000 Net income $62,250 Sales (all on credit) 305,000 Cost of goods sold 123,000 Interest expense 15,600 Income tax expense 27,000\begin{array}{|l|r|r|}\hline&2011&2010\\\hline\text { Assets: }\\\hline\text { Cash } & \$ 18,000 & \$ 22,000 \\\hline \text { Marketable securities } & 25,000 & 0 \\\hline \text { Accounts receivable } & 38,000 & 42,000 \\\hline \text { Inventory } & 61,000 & 52,000 \\\hline \text { Prepaid insurance } & 6,000 & 9,000 \\\hline \text { Long-term investments } & 49,000 & 20,000 \\\hline \text { Plant assets, net } & 218,000 & 225,000 \\\hline \text { Total assets } & \$ 415,000 & \$ 370,000\\\hline\\\hline\text { Net income } & \$ 62,250 \\\hline \text { Sales (all on credit) } & 305,000 \\\hline \text { Cost of goods sold } & 123,000 \\\hline \text { Interest expense } & 15,600 \\\hline \text { Income tax expense } & 27,000\\\hline\end{array}

From the above information,calculate the following ratios for 2011:
(a)Inventory turnover.
(b)Accounts receivable turnover.
(c)Return on total assets.
(d)Times interest earned.
(e)Total asset turnover.

Correct Answer:

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(a) Inventary turnover:
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