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On September 30, 20XB the trial balance of The Kearney Company appeared as follows:
Required: (1) A cost of goods sold statement for the year ended September 30, 20XB.
(2) An income statement for the year ended September 30, 20XB.
(3) A balance sheet as of September 30, 20XB.
(4) The following ratios and percentages:
(a) Current ratio.
(b) Acid-test ratio.
(c) Net income to sales percentage.
(d) Ratio of gross profit to sales.
(e) Rate of return on capital employed.
DISCOUNT CUSTOMER
37,500.00
The Keaney Company
SCHEDULE 1
STATEMENT OF COST OF GOODS SOLD
September 30, 20XB
Direct materials:
Materials inventory, October 1, 20XY $ 282,000
Purchases $ 500,000
Less puchases returns and allowances 0 500,000
Materials available for use $ 782,000
Less materials inventory,September 30 280,000
Direct materials consumed $
Direct labor
Factory overhead:
Miscellaneous Factory Overhead $ 900,000
Patterns and Drawings Expenses 35,000
Depreciation - factory building 30,000
Depreciation - machinery 165,000
Total factory overhead
Total manufacturing costs $
Add work in process inventory, october 1, 20XY
$
Less work in process inventory, September 30, 20XY
Cost of goods manufactured $
Add inventory finished goods, October 1 20XY
$
Less inventory finished goods, September 30 20XY
Cost of goods sold $
y
ODS SOLD
502,000
1,000,000
1,130,000
2,632,000
345,000
2,977,000
380,000
2,597,000
500,000
3,097,000
720,000
2,377,000
The Keaney Company
INCOME STATEMENT
September 30, 20XB
%
Sales $ 3,490,000 100.0
Less cost of goods sold 2,377,000 68.1
Gross profit on sales $ 1,113,000 31.9
Less operating expenses:
Administrative expenses 10,000
Depreceation - Building & Office 8,800
Miscellaneous Administrative expenses 250,000
Miscellaneous Marketing Expenses, Etc 350,000 618,800 17.7
Net income from operations $ 494,200 14.2
Other income and expense items:
Interest and debt expenses 35,000
Net income before estimated tax $ 459,200 13.2
Less income tax:
Net income After estimated tax $ 459,200 13.2
THE KEARNEY COMPANY
BALANCE SHEET
For Year Ended September 31, 20XB
ASSETS
Current assets:
Cash $
Note Receivable
Accounts receivable (net)
Inventories (materials, work in process, finished goods)
Prepaid insurances, taxes and mescellaneous expenses
Total current assets $
LIABILITIES
Current liabilities:
Accounts payable $
Note Payable
Accrued payroll, taxes, interst, etc.
Estimated income taxes
Due on lang-term debt
Total current liabilities $
Long-term debt
Total liabilities $
STOCKHOLDERS' EQUITY
Commen stock $ 1,000,000
Retained earnings 1,308,300
Net Income 459,200
Total stockholders' equity
Total liabilities and stockholders' equity $
PANY
31, 20XB
234,000
21,800
444,000
1,380,000
35,500
2,115,300
2,057,200
4,172,500
100,000
500,000
805,000
0
0
1,405,000
0
1,405,000
UITY
2,767,500
4,172,500 0
The more prevalent ratios are:
459,200
= 0.132
3,490,000