P18-7A Presented below is an incomplete income statement and an incomplete comparative balance sheet of Cotte Corporation

P18-7A
Presented below is an incomplete income statement and an incomplete comparative balance sheet of Cotte Corporation.

Additional information:

1. The receivables turnover for 2013 is 10 times.
2. All sales are on account.
3. The profit margin for 2013 is 14.5%.
4. Return on assets is 22% for 2013.
5. The current ratio on December 31, 2013, is 3.0.
6. The inventory turnover for 2013 is 4.8 times.

Instructions
Compute the missing information given the ratios above. (Note: Start with one ratio and derive as much information as possible from it before trying another ratio. List all missing amounts under the ratio used to find the information.)

COTTE CORPORATION Income Statement
For the Year Ended December 31, 2013
Sales $11,000,000 Cost of goods sold
Gross profit Operating expenses
1,665,000

Income from operations Other expenses and losses Interest expense
Income before income taxes Income tax expense
560,000

Net income
$

COTTE CORPORATION Balance Sheets
December 31
Assets 2013 2012 Current assets Cash $ 450,000 $ 375,000 Accounts receivable (net) 950,000 Inventory

1,720,000

Total current assets

3,045,000

Plant assets (net)
4,620,000


3,955,000

Total assets
$


$7,000,000

Liabilities and Stockholders\' Equity Current liabilities $ $825,000 Long-term notes payable

2,800,000

Total liabilities

3,625,000

Common stock $1 par) 3,000,000 3,000,000 Retained earnings
400,000


375,000

Total stockholders\' equity
3,400,000


3,375,000

Total liabilities and stockholders\' equity
$




$7,000,000



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