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Recent financial statements for Madison Company follow:

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Question;Recent financial statements for Madison Company follow;Madison Company;Balance Sheet;June 30;Assets;Current;assets;Cash;$;21,000;Accounts;receivable, net;160,000;Merchandise;inventory;300,000;Prepaid;expenses;9,000;Total;current assets;490,000;Plant and;equipment, net;810,000;Total;assets;$;1,300,000;Liabilities;and Stockholders' Equity;Liabilities;Current;liabilities;$;200,000;Bonds;payable, 10%;300,000;Total;liabilities;500,000;Stockholders?;equity;Common;stock, $5 par value;$;100,000;Retained;earnings;700,000;Total;stockholders? equity;800,000;Total;liabilities and stockholders' equity;$;1,300,000;Madison Company;Income Statement;For the Year Ended June 30;Sales;$;2,100,000;Cost of;goods sold;1,260,000;Gross;margin;840,000;Selling;and administrative expenses;660,000;Net;operating income;180,000;Interest;expense;30,000;Net income;before taxes;150,000;Income;taxes;45,000;Net income;$;105,000;Account balances at the beginning;of the company?s fiscal year were: accounts receivable, $140,000, and;inventory, $260,000. All sales were on account.;Required;Compute financial;ratios as follows;1.;Gross margin percentage.(Omit the "%;sign in your response.);Gross;margin percentage;%;2.;Current ratio.(Round your answer to 2;decimal places.);Current;ratio;3.;Acid-test ratio.(Round your answer to 2;decimal places.);Acid-test;ratio;4.;Average collection;period.(Use 365 days in a year. Round your answer to 1 decimal place.);Average;collection period;days;5.;Average sale period.(Use 365 days in a year.;Do not round intermediate calculations. Round your answer to 1 decimal;place.);Average;sale period;days;6.;Debt-to-equity ratio.(Round your answer to 2;decimal places.);Debt-to-equity;ratio;7.;Times interest earned.(Round your answer to 1;decimal place.);Times;interest earned;8.;Book value per share.(Omit the "$" sign in your response.);Book value;$ per share

 

Paper#40396 | Written in 18-Jul-2015

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