The following accounts and balances are taken from the general ledger of Cebu Trading Co.

Sales P5,000,000
Sales Discount 40,000
Sales Returns and Allowances 30,000
Purchases 2,700,000
Freight In 100,000
Purchase Discount 60,000
Purchase Returns and Allowances 80,000
Merchandise Inventory, Jan. 1 120,000
Merchandise Inventory, Dec. 31 105,000
Operating Expenses 850,000

From the above information

1. The net sales is ____________________.
2. The net purchases is ______________________.
3. The cost of goods sold is ___________________.
4. Gross profit is ____________________.
5. Net income is ________________.

Prepare income statement.

In 2019 Charlie Synder opened Charlie’s Pets, a small retail shop selling pet supplies. On December 31, 2019, Charlie’s accounting
records showed the following:

Inventory, Dec. 31 10,200

Inventory, Jan. 1 15,100
Sales Revenue 57,000
Utilities Expense 3,900
Rent Expense 4,100
Sales Commissions 2,150
Purchases 27,000

Prepare income statement.

Gross Sales 500,000

Interest Expense 700
Sales Returns and Allowances 5,000
Interest Revenue 1,000
Sales Discount 3,000
Administrative Expense 45,000
Cost of Goods Sold 294,000
Selling Expense 50,000

Compute for the cost of goods sold.

Kingram Pencil Pusher sells pencils to office supplies stores and other retailers around the world. On January 1, the company’s
inventory was P41,000. During the year, the company purchased P895,000 worth of pencils. A physical count of the inventory on
December 31 revealed that there were P23,000 worth of pencils remaining.
 The financial statements of Black Barn Company are given below

   

 18. Refer to the financial statements of Black Barn Company. The firm's current ratio for 2009 is ____. 
A. 2.31
B. 1.87
C. 2.22
D. 2.46
E. None of these is correct.
$3,240,000/$1,400,000 = 2.31.

 19. Refer to the financial statements of Black Barn Company. The firm's quick ratio for 2009 is ____. 
A. 1.69
B. 1.52
C. 1.23
D. 1.07
E. 1.00
($3,240,000 − $1,840,000)/$1,400,000 = 1.00.
 
20. Refer to the financial statements of Black Barn Company. The firm's leverage ratio for 2009 is ____. 
A. 1.65
B. 1.89
C. 2.64
D. 1.31
E. 1.56
$6,440,000/$4,140,000 = 1.56.
 
21. Refer to the financial statements of Black Barn Company. The firm's times interest earned ratio for 2009 is ____. 
A. 8.86
B. 7.17
C. 9.66
D. 6.86
E. None of these is correct.
$1,240,000/$140,000 = 8.86.
 
22. Refer to the financial statements of Black Barn Company. The firm's average collection period for 2009 is ____. 
A. 59.31
B. 55.05
C. 61.31
D. 49.05
E. None of these is correct.
AR Turnover = $8,000,000/[($1,200,000 + $950,000)/2] = 7.44; ACP = 365/7.44 = 49.05 days.
 
23. Refer to the financial statements of Black Barn Company. The firm's inventory turnover ratio for 2009 is ____. 
A. 3.15
B. 3.63
C. 3.69
D. 2.58
E. 4.20
$5,260,000/[($1,840,000 + $1,500,000)/2] = 3.15.
 
24. Refer to the financial statements of Black Barn Company. The firm's fixed asset turnover ratio for 2009 is ____. 
A. 2.04
B. 2.58
C. 2.97
D. 1.58
E. None of these is correct.
$8,000,000/[($3,200,000 + $3,000,000)/2] = 2.58.
 
25. Refer to the financial statements of Black Barn Company. The firm's asset turnover ratio for 2009 is ____. 
A. 1.79
B. 1.63
C. 1.34
D. 2.58
E. None of these is correct.
$8,000,000/[($6,440,000 + $5,500,000)/2] = 1.34.

26. Refer to the financial statements of Black Barn Company. The firm's return on sales ratio for 2009 is _____ percent. 
A. 15.5
B. 14.6
C. 14.0
D. 15.0
E. 16.5
$1,240,000/$8,000,000 = 0.155 or 15.5%.
 
27. Refer to the financial statements of Black Barn Company. The firm's return on equity ratio for 2009 is ____. 
A. 16.90%
B. 15.63%
C. 14.00%
D. 15.00%
E. 16.24%
$660,000/[($4,140,000 + $3,680,000)/2] = .169.

28. Refer to the financial statements of Black Barn Company. The firm's P/E ratio for 2009 is ____. 
A. 8.88
B. 7.63
C. 7.88
D. 7.32
E. None of these is correct
EPS = $660,000/130,000 = $5.08; $40/$5.08 = 7.88.
 
29. Refer to the financial statements of Black Barn Company. The firm's market to book value for 2009 is ____. 
A. 1.13
B. 1.62
C. 1.00
D. 1.26
E. None of these is correct
$40/$31.85 = 1.26.