Compute the specified ratios using the following December 31, 2018, statement of financial position for Palmer Company.

Assets

Cash……………………………………………………………….. $110,000

Marketable securities…………………………………………………. 10,000

Accounts receivable………………………………………………… 120,000

Inventory…………………………………………………………… 160,000

Property and equipment……………………………………………. 250,000

Accumulated depreciation…………………………………………. (50,000)

Total assets………………………………………………………… $600,000

Liabilities and Stockholders’ Equity

Accounts payable………………………………………………….. $ 86,000

Current notes payable………………………………………………… 4,000

Mortgage payable………………………………………………….. 130,000

Bonds payable………………………………………………………. 82,000

Common stock…………………………………………………….. 200,000

Retained earnings…………………………………………………… 98,000

Total liabilities and stockholders’ equity………………………… $600,000

The average number of common shares outstanding during 2018 was 1,500. Net income for the year was $60,000.

Required

Compute each of the following and round computations to two decimal points.

a. Current ratio

b. Earnings per share

c. Acid-test ratio

d. Return on investment

e. Return on equity

f. Debt to equity ratio

Compute the specified ratios using the following December 31 2018



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