1 answer

Wahlberg Company Income Statement For the Years Ended December 31 2020 2019 $1,811,500 $1,752,200 1,008.900 982.000...

Question:

Wahlberg Company Income Statement For the Years Ended December 31 2020 2019 $1,811,500 $1,752,200 1,008.900 982.000 802,600 7
Wahlberg Company Balance Sheets December 31 2020 Assets 2019 Current assets Cash Debt investments (short-term) Accounts recei
All sales were on account. Net cash provided by operating activities for 2020 was $242,000. Capital expenditures were $128,00
Wahlberg Company Income Statement For the Years Ended December 31 2020 2019 $1,811,500 $1,752,200 1,008.900 982.000 802,600 770.200 518.600 472.800 Net sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations Other expenses and losses Interest expense Income before income taxes Income tax expense 284,000 297 400 17 800 13.800 283.600 266 200 80.152 76.400 Net income $ 186.048 $ 207 200 Wahlberg Company Balance Sheets December 31 Assets Current asset 2020 2019
Wahlberg Company Balance Sheets December 31 2020 Assets 2019 Current assets Cash Debt investments (short-term) Accounts receivable $59,700 70,500 117.200 123.900 371.300 800.800 $972 100 $64.400 50,000 102,200 115.000 331 600 521.900 $853.500 Inventory Total current assets Plant assets (net) Total assets Liabilities and Stockholders Equity Current liabilities Accounts payable Income taxes payable Total current liabilities Bonds payable Total liabilities stockholders equity Common stock Retearmes Totater que Toto $159 300 $144 200 43.500 41000 202800185.200 220.000 200.000 422 800 385.200 282.800208600 184,500 169.00 81300
All sales were on account. Net cash provided by operating activities for 2020 was $242,000. Capital expenditures were $128,000, and cash dividends were $89.248 Compute the following ratios for 2020. (Round Earnings per share, Current ratio and Asset turnover to 2 decimal places, s. 165 o 1.63:1, and all other answers to 1 decimal (a) Earnings per share (b) Return on common stockholders' equity times (d) Return on assets (d) Current ratio le) Accounts receivable turnover in Average collection period (8) Inventory turnover (h) Days in inventory (1) Times interest earned days times days times time Asset turnover 1) Debt to assets ratio 0) Free cash flow

Answers

First 6 parts are being answered here.

(a) Earnings per share (EPS) = Net income / Average number of common shares outstanding

where, Average number of common shares outstanding = Beginning common shares + Ending common shares / 2

Beginning number of common shares = Common shares in 2019 / Par value per share

Beginning common shares = $298600 / $5 = 59720

Ending common shares = Common shares in 2020 / Par value per share

Ending number of common shares = $282800 / $5 = 56560

Average number of common shares outstanding = ($59720 + $56560) / 2 = 116280 / 2 = 58140

Net income in 2020 (given) = $186048

Putting these values in the earnings per share formula, we get,

Earnings per share (EPS) in 2020 = $186048 / 58140 = $3.2 per share

(b) Return on common stockholder's equity (ROE) = Net income / Average stockholder's equity * 100

where, Average stockholder's  equity = Beginning stockholder's equity + Ending stockholder's equity / 2

For 2020:

So, Average stockholder's equity = ($468300 + $549300) / 2 = $1017600 / 2 = $508800

Net income = $186048

Now, putting these values in the above ROE formula, we get,

Return on common stockholder's equity (ROE) = $186048 / $508800 * 100 = 36.6%%

(c) Return on assets (ROA) = Net income / Average total assets * 100

where, Average total assets = Beginning assets + Ending assets / 2

For 2020:

Average assets = ($853500 + $972100) / 2 = $1825600 / 2 = $912800

Net income = $186048

Now, putting these values in the above ROA formula, we get,

Return on assets (ROA) = $186048 / $912800 * 100 = 20.4%

(d) Current ratio = Current assets / Current liabilities

For 2020:

Current assets = $371300, Current liabilities = $202800

Now, putting these values in the current ratio formula, we get,

Current ratio = $371300 / $202800 = 1.83

(e) Accounts receivable turnover ratio = Sales / Average accounts receivables

where, Average accounts receivables = Beginning accounts receivables + Ending receivables / 2

For 2020:

Beginning accounts receivables = $102200, Ending accounts receivables = $117200

Average accounts receivables = ($102200 + $117200) / 2 = $219400 / 2 = $109700

Sales = $1811500

Putting these values in the accounts receivable turnover ratio formula, we get,

Accounts receivables turnover ratio = $1811500 / $109700 = 16.5

(f) Average collection period = 365 / Accounts receivable turnover ratio

For 2020:

Accounts receivable turnover ratio = 16.5 times ( as computed in point (d) above)

Putting these values in the Days' sales in inventory ratio formula, we get,

Average collection period = 365 / 16.5 = 22.1 days

.

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