LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2017 and 2018 2018 2017 Gross sales $ 23,800 $ 18,600 Sales returns and allowances 1,000 100 Net sales $ 22,800 $ 18,500 Cost of merchandise (goods) sold 10,800 7,200 Gross profit $ 12,000 $ 11,300 Operating expenses: Depreciation $ 1,180 $ 840 Selling and administrative 5,800 4,400 Research 1,030 740 Miscellaneous 840 540 Total operating expenses $ 8,850 $ 6,520 Income before interest and taxes $ 3,150 $ 4,780 Interest expense 1,040 740 Income before taxes $ 2,110 $ 4,040 Provision for taxes 844 1,616 Net income $ 1,266 $ 2,424 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 11,100 $ 8,100 Accounts receivable 15,600 11,600 Merchandise inventory 7,600 13,100 Prepaid expenses 23,100 9,100 Total current assets $ 57,400 $ 41,900 Plant and equipment: Building (net) $ 13,600 $ 10,200 Land 12,600 8,100 Total plant and equipment $ 26,200 $ 18,300 Total assets $ 83,600 $ 60,200 Liabilities Current liabilities: Accounts payable $ 12,100 $ 6,100 Salaries payable 6,100 4,100 Total current liabilities $ 18,200 $ 10,200 Long-term liabilities: Mortgage note payable 21,100 19,600 Total liabilities $ 39,300 $ 29,800 Stockholders’ Equity Common stock $ 20,100 $ 20,100 Retained earnings 24,200 10,300 Total stockholders’ equity $ 44,300 $ 30,400 Total liabilities and stockholders’ equity $ 83,600 $ 60,200 Calculate the asset turnover ratio. (Round your answers to the nearest hundredth.) (FOR 2018 AND 2017)

LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2017 and 2018 2018 2017 Gross sales $ 23,800 $ 18,600 Sales returns and allowances 1,000 100 Net sales $ 22,800 $ 18,500 Cost of merchandise (goods) sold 10,800 7,200 Gross profit $ 12,000 $ 11,300 Operating expenses: Depreciation $ 1,180 $ 840 Selling and administrative 5,800 4,400 Research 1,030 740 Miscellaneous 840 540 Total operating expenses $ 8,850 $ 6,520 Income before interest and taxes $ 3,150 $ 4,780 Interest expense 1,040 740 Income before taxes $ 2,110 $ 4,040 Provision for taxes 844 1,616 Net income $ 1,266 $ 2,424 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 11,100 $ 8,100 Accounts receivable 15,600 11,600 Merchandise inventory 7,600 13,100 Prepaid expenses 23,100 9,100 Total current assets $ 57,400 $ 41,900 Plant and equipment: Building (net) $ 13,600 $ 10,200 Land 12,600 8,100 Total plant and equipment $ 26,200 $ 18,300 Total assets $ 83,600 $ 60,200 Liabilities Current liabilities: Accounts payable $ 12,100 $ 6,100 Salaries payable 6,100 4,100 Total current liabilities $ 18,200 $ 10,200 Long-term liabilities: Mortgage note payable 21,100 19,600 Total liabilities $ 39,300 $ 29,800 Stockholders’ Equity Common stock $ 20,100 $ 20,100 Retained earnings 24,200 10,300 Total stockholders’ equity $ 44,300 $ 30,400 Total liabilities and stockholders’ equity $ 83,600 $ 60,200 Calculate the asset turnover ratio. (Round your answers to the nearest hundredth.) (FOR 2018 AND 2017)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 57BE

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LOGIC COMPANY
Comparative Income Statement
For Years Ended December 31, 2017 and 2018

	2018	2017
Gross sales	$	23,800	$	18,600
Sales returns and allowances		1,000		100
Net sales	$	22,800	$	18,500
Cost of merchandise (goods) sold		10,800		7,200
Gross profit	$	12,000	$	11,300
Operating expenses:
Depreciation	$	1,180	$	840
Selling and administrative		5,800		4,400
Research		1,030		740
Miscellaneous		840		540
Total operating expenses	$	8,850	$	6,520
Income before interest and taxes	$	3,150	$	4,780
Interest expense		1,040		740
Income before taxes	$	2,110	$	4,040
Provision for taxes		844		1,616
Net income	$	1,266	$	2,424

LOGIC COMPANY
Comparative Balance Sheet
December 31, 2017 and 2018

	2018	2017
Assets
Current assets:
Cash	$	11,100	$	8,100
Accounts receivable		15,600		11,600
Merchandise inventory		7,600		13,100
Prepaid expenses		23,100		9,100
Total current assets	$	57,400	$	41,900
Plant and equipment:
Building (net)	$	13,600	$	10,200
Land		12,600		8,100
Total plant and equipment	$	26,200	$	18,300
Total assets	$	83,600	$	60,200
Liabilities
Current liabilities:
Accounts payable	$	12,100	$	6,100
Salaries payable		6,100		4,100
Total current liabilities	$	18,200	$	10,200
Long-term liabilities:
Mortgage note payable		21,100		19,600
Total liabilities	$	39,300	$	29,800
Stockholders’ Equity
Common stock	$	20,100	$	20,100
Retained earnings		24,200		10,300
Total stockholders’ equity	$	44,300	$	30,400
Total liabilities and stockholders’ equity	$	83,600	$	60,200

Calculate the asset turnover ratio. (Round your answers to the nearest hundredth.)

(FOR 2018 AND 2017)

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