E15-7

Question

Bennis Company has the following comparative balance sheet data.
BENNIS COMPANY
Balance Sheets
December 31
2009 2008
Cash $ 15,000 $ 30,000
Receivables (net) 70,000 60,000
Inventories 60,000 50,000
Plant assets (net) 200,000 180,000
$345,000 $320,000

Accounts payable $50,000 $60,000
Mortgage payable (15%) 100,000 100,000
Common stock, $10 par 140,000 120,000
Retained earnings 55,000 40,000
$345,000 $320,000
Additional information for 2009:
1. Net income was $25,000.
2. Sales on account were $410,000. Sales returns and allowances were $20,000.
3. Cost of goods sold was $198,000.
Instructions
Compute the following ratios at December 31, 2009. (Round answers to 1 decimal place, e.g. 10.5.)
(a) Current ratio : 1

(b) Acid-test ratio : 1

(c) Receivables turnover times

(d) Inventory turnover times