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Copy 1 ACC 223 Practice Problems For Financial Ratio Analysis
Copy 1 ACC 223 Practice Problems For Financial Ratio Analysis
PROBLEM 1
ETC Corporation selected financial data for December 31, 2022:
Current assets P 150,000
Current liabilities 100,000
Inventories 50,000
Accounts receivable 40,000
Net sales 900,000
Cost of goods sold 675,000
PROBLEM 2
SPF Corporation selected financial data for December 31, 2022:
Net sales P 1,800,000
Cost of goods sold 1,080,000
Operating expenses 315,000
Net operating income 405,000
Net income 195,000
Total equity 750,000
Total assets 1,000,000
Cash flow from operating activities 25,000
PROBLEM 3
The December 31, 2022, statement of financial position of Trend, Inc. is presented below. These are the only accounts
in Trend’s statement of financial position. Amounts indicated by question mark (?) can be calculated from the additional
information given.
Assets
Cash P 25,000
Accounts receivable (net) ?
Inventory ?
Property, plant, and equipment (net) 294,000
Total P 432,000
Additional information:
Current ratio (year-end) 1.5 to 1
Total liabilities divided by total equity 0.8
Inventory turnover based on sales and ending inventory 15 times
Inventory turnover based on cost of goods sold and 10.5 times
ending inventory
Gross margin for 2022 P 315,000
Compute for the following:
1. Balance of trade accounts payable
2. Balance in retained earnings
3. Balance in inventory account
4. Balance of accounts receivable
5. Balance of long-term debt
PROBLEM 4
Tan Company’s accountant is preparing the company’s Statement of Cash Flows for 200B. Selected information that
may be helpful in the preparation of the statement is as follows:
Dec. 31, 200B Dec. 31, 200A Increase (Decrease)
Cash P 53,760 P 10,400 P 43,360
Accounts receivable 62,000 48,800 13,200
Inventories 66,720 69,360 (2,640)
Accounts payable 41,680 40,080 1,600
Other information:
• Included in the operating expenses are:
o Loss of P 1,920 resulting from the sale of an equipment for P21,600 cash
o Depreciation expense of P70,400
• The company purchased machinery for P60,000 cash during the year.
• The income tax shown on the income statement was paid in full during the year.
• During the year, the company declared and paid dividends of P16,000
PROBLEM 5
The following information is available for Waqui’s Jewelry and Gift Store:
Net income P 5,000
Depreciation expense 2,500
Increased in deferred tax liabilities 500
Decrease in cash 3,000
Increase in marketable securities 1,000
Decrease in accounts receivable 2,000
Increase in inventories 9,000
Decrease in accounts payable 5,000
Increase in accrued liabilities 1,000
Increase in property, plant, and equipment 14,000
Increase in short-term notes payable 19,000
Decrease in long-term notes payable 4,000
COMPREHENSIVE
Following are selected financial and operating data taken from the financial statements of Antiporda Corporation:
As of December 31
200B 200A
Cash P 80,000 P 640,000
Notes and accounts receivable, net 400,000 1,200,000
Merchandise inventory 720,000 1,200,000
Marketable securities – short-term 240,000 80,000
Land and buildings (net) 2,720,000 2,880,000
Bonds payable – long-term 2,160,000 2,240,000
Accounts payable – trade 560,000 880,000
Notes payable – short-term 160,000 320,000
Following are some date from the financial records of Dave Corporation:
200B 200A
Sales P 500,000 P 375,000
Common stock 125,000
Retained earnings 105,000
Dividend payout ratio 40%
After tax profit 4% of sales
Cash 12% of sales
Accounts receivable 18% of sales
Inventory 30% of sales
Fixed assets, net 40% of sales
Accounts payable 20% of sales
Accruals 5% of sales
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