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Summative Quiz 2

The document provides financial statements for Solar Company for the years ended December 31, 2017 and 2018, including an income statement, statement of financial position, and key financial ratios for 2018. It asks the reader to complete missing figures in the financial statements based on the additional information provided, including ratios and without rounding decimals.

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Sheena Gallentes Leyson
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76 views3 pages

Summative Quiz 2

The document provides financial statements for Solar Company for the years ended December 31, 2017 and 2018, including an income statement, statement of financial position, and key financial ratios for 2018. It asks the reader to complete missing figures in the financial statements based on the additional information provided, including ratios and without rounding decimals.

Uploaded by

Sheena Gallentes Leyson
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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SAINT COLUMBAN COLLEGE

College of Business Education


Pagadian City

ASSIGNMENT 2: RATIO ANALYSIS

SOLAR COMPANY
Income Statement
For the year ended December 31, 2018

Gross Sales ?
Less: Sales Returns & Allowances 200,000
Net Sales ?
Cost of Goods Sold ?
Gross Profit ?
Operating Expenses:
Doubtful Accounts Expense ?
Depreciation Expense ?
Rent Expense 50,000
Advertising Expense 40,000
Salaries Expense 60,000 ?
Operating Income / EBIT / PBIT ?
I nterest Expense ?
Income Before Tax / EBT / PBT ?
I ncome Tax Expense (30%) ?
Income After Tax / Net Income / Profit ?

Net Income / Profit ?


Preference Dividends 80,000
Profit Available to Ordinary Shareholders (PAOS) ?
SOLAR COMPANY
Comparative Statement of Financial Position
As of the years ended December 31, 2017 and 2018

2017 2018

Cash and Cash Equivalents 100,000 250,000


Marketable Securities 200,000 150,000
Accounts Receivable 300,000 ?
Allowance for Doubtful Accounts - 30,000 - 50,000
I nv entories 250,000 ?
Prepaid Expenses 150,000 200,000
Total Current Assets 970,000 ?

Long-term I nv estments 1,200,000 ?


Property, Plant and Equipment 3,000,000 3,000,000
Accumulated Depreciation - 670,000 - 850,000
Other Assets 0 100,000
Total Noncurrent Assets 3,530,000 ?

TOTAL ASSETS 4,500,000 ?

Accounts Payable 220,000 ?


Accrued Expenses 80,000 ?
Short-term Bank Notes Payable 100,000 200,000
Total Current Liabilities 400,000 500,000

Bonds Payable 800,000 ?


Long-term Notes Payable 800,000 1,300,000
Total Noncurrent Liabilities 1,600,000 ?

Ordinary Share Capital, P100 par value 1,200,000 1,360,000


10% Preference Shares, P160 par value 800,000 1,000,000
Share Premium 300,000 ?
Retained Earnings 200,000 ?
Total Shareholders’ Equity 2,500,000 ?

TOTAL LIABILITIES & EQUITY 4,500,000 ?

Additional Information: Some of the relevant financial ratios for the year 2018 computed from
the financial statements are given below:

Working Days in a Year 360 Days


Acid Test Ratio 1.70
Current Ratio 2.50
Collection Period 64.80 Days
Inventory Period 67.50 Days
Payable Turnover 5.75 times
Times Interest Earned Ratio 9 times
Times Preference Dividends Earned 3.50 times
Assets Turnover 0.40
Debt Ratio 50%
Dividends on Ordinary Shares 50,000

Requirements: Complete the missing figures. In solving this problem, DO NOT round up all the
decimal points into whole number, including the days.

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