Problem 2-8: Statement of Cost of Goods Sold; Income Statement; Balance Sheet; Ratio A

On September 30, 20XB the trial balance of The Kearney Company appeared as follows:

THE KEARNEY COMPANY

TRIAL BALANCE
September 30, 20XB

Cash in Banks and on Hand ....... $ 234,000

Notes Receivable .......... 21,800
Accounts Receivable ........444,000
Raw Materials Inventory, October 1, 20XA ...... 282,000
Work in Process Inventory, October 1, 20XA ....... 345,000
Finished Goods Inventory, October 1, 20XA ........ 500,000
Prepaid Expenses ......... 35,500
Land ........... 150,000
Buildings . ..........
###
Accumulated Depreciation - Buildings .................
Machinery ........
###
Accumulated Depreciation - Machinery ....
Office Furniture and Fixtures .......... 26,000
Accumulated Depreciation - Office Furniture and Fixtures ....................
Notes Payable .......
Accounts Payable .........
Accrued Wages Payable .......
Accrued Interest on Mortgage ........
Mortgage on Plant .......
Capital Stock .....
Earnings Retained in Business .......
Sales ......
Sales Allowances ....... 60,000
Raw Materials Purchased .... 500,000
Direct Labor ......
###
Patterns and Drawings Expenses ......... 35,000
Miscellaneous Factory Overhead ..........900,000
Freight and Postage on Sales ... 10,000
Miscellaneous Marketing Expenses ........ 350,000
Miscellaneous Administrative Expenses ..... 250,000
Interest Earned .........
Interest Paid ...... 60,000
Discount on Sales .......... 50,000
Totals .... $
###

$ 150,000
660,000
5,000
500,000
100,000
50,000
5,000
750,000
###
###
###

25,000

###

The following information is also available:

Inventories on September 30, 20XB:
Raw materials, $ 280,000
Work in process, $ 380,000
Finished goods, $ 720,000

Allowances for depreciation: (penyusutan)

3 % on buildings (80 % to factory, 20 % to
10 % on machinery
5 % on office furniture and fixtures

Required: (1) A cost of goods sold statement for the year ended September 30, 20XB.
(2) An income statement for the year ended September 30, 20XB.
(3) A balance sheet as of September 30, 20XB.
(4) The following ratios and percentages:
(a) Current ratio.

(b) Acid-test ratio.

(c) Net income to sales percentage.
(d) Ratio of gross profit to sales.
(e) Rate of return on capital employed.