Financial and Managerial Accounting: PR15-4A The comparative financial statements of Blige Inc

Financial and Managerial Accounting
PR15-4A Nineteen Measures of Liquidity, Solvency and Profitability
The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $60 on December 31, 2014.
Blige Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 2014 and 2013
2014 2013
Retained earnings, January 1 1,810,000 1,526,000
Add net income for year 410,750 322,000
Total 2,220,750 1,848,000
Deduct dividends
On preferred stock 16,000 16,000
On common stock 22,000 22,000
Total 38,000 38,000
Retained earnings, December 31 $2,182,750 $1,810,000

Blige Inc.
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013
2014 2013
Sales 2,211,000 2,037,200
Sales returns and allowances 11,000 7,200
Net sales 2,200,000 2,030,000
Cost of goods sold 825,000 811,200
Gross profit 1,375,000 1,218,800
Selling expenses 445,500 484,000
Administrative expenses 321,750 290,400
Total operating expenses 767,250 774,400
Income from operations 607,750 444,400
Other income 33,000 26,400
640,750 470,800
Other expense (interest) 176,000 96,000
Income before income tax 464,750 374,800
Income tax expense 54,000 52,800
Net income $410,750 $322,000

Blige Inc.
Comparative Balance Sheet
December 31, 2014 and 2013
Dec. 31, 2014 Dec. 31, 2013
Assets
Current assets
Cash 528,000 410,000
Temporary investments 800,000 725,000
Accounts receivable (net) 425,000 400,000
Inventories 310,000 240,000
Prepaid expenses 100,000 75,000
Total current assets 2,163,000 1,850,000
Long-term investments 633,000 560,000
Property, plant, and equipment (net) 3,146,750 2,150,000
Total assets $5,942,750 $4,560,000
Liabilities
Current liabilities 720,000 710,000
Long-term liabilities
Mortgage note payable, 8%, due 2019 1,000,000 -
Bonds payable, 8%, due 2015 1,200,000 1,200,000
Total long-term liabilities 2,200,000 1,200,000
Total liabilities 2,920,000 1,910,000
Stockholders' Equity
Preferred $0.70 stock, $50 par 400,000 400,000
Common stock, $10 par 440,000 440,000
Retained earnings 2,182,750 1,810,000
Total stockholders' equity 3,022,750 2,650,000
Total liabilities and stockholders' equity $5,942,750 $4,560,000

Required:
Determine the following measures for 2014, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.
1. Working capital
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days' sales in receivables
6. Inventory turnover
7. Number of days' sales in inventory
8. Ratio of fixed assets to long-term liabilities
9. Ratio of liabilities to stockholders' equity
10. Number of times interest charges are earned
11. Number of times preferred dividends are earned
12. Ratio of net sales to assets
13. Rate earned on total assets
14. Rate earned on stockholders' equity
15. Rate earned on common stockholders' equity
16. Earnings per share on common stock
17. Price-earnings ratio
18. Dividends per share of common stock
19. Dividend yield
Powered by