Student name:. Course name:. Instructor name:. Date sub

Added on - 20 Sep 2019

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Student name:Course name:Instructor name:Date submitted:The following information relates to Harris Corporation.
AccountCurrent yearPrior yearNet sales (all credit)$520,125$499,500Cost of goods sold$375,960$353,600Gross profit$144,165$145,900Income from operations$ 95,500$ 79,900Interest expense$ 23,500$ 19,500Net income$ 57,600$ 51,600Cash$ 30,600$ 15,900Accounts receivable, net$ 33,800$ 23,200Inventory$ 42,000$ 30,300Prepaid expenses$ 2,000$ 1,500Total current assets$ 108,400$ 70,900Total long-term assets$ 62,000$ 38,000Total current liabilities$ 46,000$ 41,600Total long-term liabilities$ 20,000$ 22,700Common stock, no par, 3,000 shares, value$50/share$ 30,000$ 30,000a.What is the acid-test ratio for the current year?Solution-Acid-test ratio = (Current Assets – Inventory – Prepaid Expenses)/Current LiabilitiesAcid-test ratio = ($108,400 - $42,000 - $2,000)/$46,000Acid-test ratio = 1.40b.What is the inventory turnover for the current year?Solution-Inventory turnover = Cost of goods sold/Average InventoryInventory turnover = $375,960 / [($42,000+$30,300)/2]Inventory turnover = 10.40c.What is days’ sale in receivables for the current year?Solution-Days’ sale in receivables = Average Accounts receivable *365 / Net credit salesDays’ sale in receivables = {[($33,800+$23,200)/2]*365}/$520,125Days’ sale in receivables = 20 daysd.What is the book value per share of common stock for the current year?Solution-Book value per share of common stock = (Total asset -Total liabilities) / Number ofsharesBook value per share of common stock = ($170,400-$66,000)/3,000
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