Armada Company Has These Comparative Balance Sheet Data Additional Information for 2014:
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Essay

Armada Company has these comparative balance sheet data: $\begin{array}{c}\text { ARMADA COMPANY}\\\text { Balance Sheets }\\\text { December 31 .}\\\begin{array}{lrr}&\underline{2014}&\underline{2013}\\\text { Cash } & \$ 40,000 & \$ 30,000 \\\text { Accounts receivable (net) } & 65,000 & 60,000 \\\text { nnventories } & 60,000 & 50,000 \\\text { Plant assets (net) } & \underline{185,000} &\underline{180,000} \\&\underline{\$ 350,000}&\underline{\$ 320,000}\\ \text { Accounts payable } & \underline{\$ 50,000} & \$ 60,000 \\\text { Mortgage payable (15\%, due in 15 years) } & 100,000 & 100,000 \\\text { Common stock, } \$ 10 \text { par } & 140,000 & 120,000 \\\text { Retained earnings } & \underline{60,000 }&\underline{40,000} \\&\underline{\$350,000}&\underline{\$320,000}\end{array}\end{array}$ Additional information for 2014:
1. Net income was $25,000.
2. Sales on account were $450,000. Sales returns and allowances amounted to $25,000.
3. Cost of goods sold was $275,000.
4. Net cash provided by operating activities was $49,000.
5. Capital expenditures were $23,000, and cash dividends were $18,000.
Instructions
Compute the following ratios at December 31, 2014.
(a) Current. (e) Days in inventory
(b) Accounts receivable turnover. (f) Cash debt coverage.
(c) Average collection period. (g) Current cash debt coverage.
(d) Inventory turnover. (h) Free cash flow.