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Calculate the following ratios for 2025 and 2026. (Round current ratio to 2 decimal places, e.g. 12.61, debts to assets and gross profit rate to 0 decimal places, e.g.12, and all other answers to 1 decimal place, e.g. 12.6%) Please show your work. 1. Current ratio 2. Debts to assets 3. Gross profit rate 4. Profit margin 5. Return on assets (Total assets at November 1, 2024, were $35,180) 6. Return on common stockholder's equity (Total common stockholders' equity at November 1, 2024, was $25, 180. Dividends on preferred stock were $16,800 in 2025 and $18,000 in 2026)

Calculate the following ratios for 2025 and 2026. (Round current ratio to 2 decimal places, e.g. 12.61, debts to assets and gross profit rate to 0 decimal places, e.g.12, and all other answers to 1 decimal place, e.g. 12.6%) Please show your work. 1. Current ratio 2. Debts to assets 3. Gross profit rate 4. Profit margin 5. Return on assets (Total assets at November 1, 2024, were $35,180) 6. Return on common stockholder's equity (Total common stockholders' equity at November 1, 2024, was $25, 180. Dividends on preferred stock were $16,800 in 2025 and $18,000 in 2026)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Calculate the following ratios for 2025 and 2026. (Round current ratio to 2 decimal places, e.g. 12.61, debts to assets and gross profit rate to 0 decimal places, e.g.12, and all other answers to 1 decimal place, e.g. 12.6%) Please show your work.

1. Current ratio

2. Debts to assets

3. Gross profit rate

4. Profit margin

5. Return on assets (Total assets at November 1, 2024, were $35,180)

6. Return on common stockholder's equity (Total common stockholders' equity at November 1, 2024, was $25, 180. Dividends on preferred stock were $16,800 in 2025 and $18,000 in 2026)

 

 

The comparative balance sheet of Cookie & Coffee Creations Inc. at October 31, 2026 for the years 2026 and 2025, and the income statements for the years ended October 31, 2025 and 2026, are presented below. Assets Cash Accounts receivable Inventory Prepaid expenses Equipment Accumulated depreciation Total assets COOKIE & COFFEE CREATIONS INC. Balance Sheet October 31 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Dividends payable Salaries and wages payable Interest payable Note payable-current portion Note payable-long-term portion Preferred stock, no par, $6 cumulative-3,000 and 2,800 shares issued, respectively Common stock, $1 par-25,930 shares issued Additional paid in capital-treasury stock Retained earnings Less treasury stock Total liabilities and stockholders' equity 2026 2025 $11,550 2,710 7,450 6,050 102,000 75,500 (25,200) (9,100) $122,821 $29,074 3,250 7,897 5,800 $1,150 9,251 27,000 7,250 4,000 6,000 15,000 25,930 250 26,802 $122,821 $94,160 $2,450 7,200 27,000 1,280 0 0 0 14,000 25,930 0 16,800 (500) $94,160
Transcribed Image Text:The comparative balance sheet of Cookie & Coffee Creations Inc. at October 31, 2026 for the years 2026 and 2025, and the income statements for the years ended October 31, 2025 and 2026, are presented below. Assets Cash Accounts receivable Inventory Prepaid expenses Equipment Accumulated depreciation Total assets COOKIE & COFFEE CREATIONS INC. Balance Sheet October 31 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Dividends payable Salaries and wages payable Interest payable Note payable-current portion Note payable-long-term portion Preferred stock, no par, $6 cumulative-3,000 and 2,800 shares issued, respectively Common stock, $1 par-25,930 shares issued Additional paid in capital-treasury stock Retained earnings Less treasury stock Total liabilities and stockholders' equity 2026 2025 $11,550 2,710 7,450 6,050 102,000 75,500 (25,200) (9,100) $122,821 $29,074 3,250 7,897 5,800 $1,150 9,251 27,000 7,250 4,000 6,000 15,000 25,930 250 26,802 $122,821 $94,160 $2,450 7,200 27,000 1,280 0 0 0 14,000 25,930 0 16,800 (500) $94,160
COOKIE & COFFEE CREATIONS INC. Income Statement Year Ended October 31 2026 $485,625 $462.500 222,694 208,125 262,931 254,375 Sales Cast of goods sold Gross proft Operating expenses Salaries and wages expense Depreciation expense Other operating expenses Total operating expenses Income from operations Other expenses Interest expense Loss on disposal of plant assets Total other expenses Income before income tax Income tax expense Net income Additional information: 147,979 146,350 9,100 42,925 198,375 17,600 48,186 213,765 49.166 413 2,500 2,913 46,253 9,251 2025 $37,002 56,000 0 0 56,000 14,000 $42,000 Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more kitchen equipment. The loan would be repaid over a 4-year period. The terms of the loan provide for equal semi-annual payments of $2,500 on May 1 and November 1 of each year, plus interest of 536 on the outstanding balance.
Transcribed Image Text:COOKIE & COFFEE CREATIONS INC. Income Statement Year Ended October 31 2026 $485,625 $462.500 222,694 208,125 262,931 254,375 Sales Cast of goods sold Gross proft Operating expenses Salaries and wages expense Depreciation expense Other operating expenses Total operating expenses Income from operations Other expenses Interest expense Loss on disposal of plant assets Total other expenses Income before income tax Income tax expense Net income Additional information: 147,979 146,350 9,100 42,925 198,375 17,600 48,186 213,765 49.166 413 2,500 2,913 46,253 9,251 2025 $37,002 56,000 0 0 56,000 14,000 $42,000 Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more kitchen equipment. The loan would be repaid over a 4-year period. The terms of the loan provide for equal semi-annual payments of $2,500 on May 1 and November 1 of each year, plus interest of 536 on the outstanding balance.
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