LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2017 and 2018 2018 2017 Gross sales $ 21,400 $ 16,800 Sales returns and allowances 1,000 100 Net sales $ 20,400 $ 16,700 Cost of merchandise (goods) sold 11,400 8,400 Gross profit $ 9,000 $ 8,300 Operating expenses: Depreciation $ 940 $ 720 Selling and administrative 4,000 3,200 Research 790 620 Miscellaneous 600 420 Total operating expenses $ 6,330 $ 4,960 Income before interest and taxes $ 2,670 $ 3,340 Interest expense 800 620 Income before taxes $ 1,870 $ 2,720 Provision for taxes 748 1,088 Net income $ 1,122 $ 1,632 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 13,200 $ 10,200 Accounts receivable 17,700 13,700 Merchandise inventory 9,700 15,200 Prepaid expenses 25,200 11,200 Total current assets $ 65,800 $ 50,300 Plant and equipment: Building (net) $ 15,700 $ 12,200 Land 14,700 10,200 Total plant and equipment $ 30,400 $ 22,400 Total assets $ 96,200 $ 72,700 Liabilities Current liabilities: Accounts payable $ 14,200 $ 8,200 Salaries payable 8,200 6,200 Total current liabilities $ 22,400 $ 14,400 Long-term liabilities: Mortgage note payable 23,200 21,700 Total liabilities $ 45,600 $ 36,100 Stockholders’ Equity Common stock $ 22,200 $ 22,100 Retained earnings 28,400 14,500 Total stockholders’ equity $ 50,600 $ 36,600 Total liabilities and stockholders’ equity $ 96,200 $ 72,700 Calculate the average day’s collection. (Use 360 days a year. Do not round intermediate calculations. Round your answers to the nearest hundredth.)

LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2017 and 2018 2018 2017 Gross sales $ 21,400 $ 16,800 Sales returns and allowances 1,000 100 Net sales $ 20,400 $ 16,700 Cost of merchandise (goods) sold 11,400 8,400 Gross profit $ 9,000 $ 8,300 Operating expenses: Depreciation $ 940 $ 720 Selling and administrative 4,000 3,200 Research 790 620 Miscellaneous 600 420 Total operating expenses $ 6,330 $ 4,960 Income before interest and taxes $ 2,670 $ 3,340 Interest expense 800 620 Income before taxes $ 1,870 $ 2,720 Provision for taxes 748 1,088 Net income $ 1,122 $ 1,632 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 13,200 $ 10,200 Accounts receivable 17,700 13,700 Merchandise inventory 9,700 15,200 Prepaid expenses 25,200 11,200 Total current assets $ 65,800 $ 50,300 Plant and equipment: Building (net) $ 15,700 $ 12,200 Land 14,700 10,200 Total plant and equipment $ 30,400 $ 22,400 Total assets $ 96,200 $ 72,700 Liabilities Current liabilities: Accounts payable $ 14,200 $ 8,200 Salaries payable 8,200 6,200 Total current liabilities $ 22,400 $ 14,400 Long-term liabilities: Mortgage note payable 23,200 21,700 Total liabilities $ 45,600 $ 36,100 Stockholders’ Equity Common stock $ 22,200 $ 22,100 Retained earnings 28,400 14,500 Total stockholders’ equity $ 50,600 $ 36,600 Total liabilities and stockholders’ equity $ 96,200 $ 72,700 Calculate the average day’s collection. (Use 360 days a year. Do not round intermediate calculations. Round your answers to the nearest hundredth.)

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.8MCP

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LOGIC COMPANY
Comparative Income Statement
For Years Ended December 31, 2017 and 2018

	2018	2017
Gross sales	$	21,400	$	16,800
Sales returns and allowances		1,000		100
Net sales	$	20,400	$	16,700
Cost of merchandise (goods) sold		11,400		8,400
Gross profit	$	9,000	$	8,300
Operating expenses:
Depreciation	$	940	$	720
Selling and administrative		4,000		3,200
Research		790		620
Miscellaneous		600		420
Total operating expenses	$	6,330	$	4,960
Income before interest and taxes	$	2,670	$	3,340
Interest expense		800		620
Income before taxes	$	1,870	$	2,720
Provision for taxes		748		1,088
Net income	$	1,122	$	1,632

LOGIC COMPANY
Comparative Balance Sheet
December 31, 2017 and 2018

	2018	2017
Assets
Current assets:
Cash	$	13,200	$	10,200
Accounts receivable		17,700		13,700
Merchandise inventory		9,700		15,200
Prepaid expenses		25,200		11,200
Total current assets	$	65,800	$	50,300
Plant and equipment:
Building (net)	$	15,700	$	12,200
Land		14,700		10,200
Total plant and equipment	$	30,400	$	22,400
Total assets	$	96,200	$	72,700
Liabilities
Current liabilities:
Accounts payable	$	14,200	$	8,200
Salaries payable		8,200		6,200
Total current liabilities	$	22,400	$	14,400
Long-term liabilities:
Mortgage note payable		23,200		21,700
Total liabilities	$	45,600	$	36,100
Stockholders’ Equity
Common stock	$	22,200	$	22,100
Retained earnings		28,400		14,500
Total stockholders’ equity	$	50,600	$	36,600
Total liabilities and stockholders’ equity	$	96,200	$	72,700

Calculate the average day’s collection. (Use 360 days a year. Do not round intermediate calculations. Round your answers to the nearest hundredth.)

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