The following income statement and balance sheet for Virtual Gaming Systems are provided.
VIRTUAL GAMING SYSTEMS
Income Statement
For the year ended December 31, 2012
Sales revenue $3,039,000
Cost of goods sold 1,951,000
Gross profit 1,088,000
Expenses:
Operating expenses 868,000
Depreciation expense 42,000
Loss on sale of land 9,400
Interest expense 16,200
Income tax expense 48,600
Total expenses 984,200
Net income $ 103,800
VIRTUAL GAMING SYSTEMS
Balance Sheet
December 31
2012 2011
Assets
Current assets:
Cash $ 217,000 $ 152,000
Accounts receivable 117,000 70,000
Inventory 116,000 138,000
Prepaid rent 28,000 26,000
Long-term assets:
Investment in bonds 130,000 0
Land 219,000 241,000
Equipment 165,000 169,000
Less: Accumulated depreciation (72,000) (30,000)
Total assets $ 920,000 $ 766,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 76,000 $ 93,000
Interest payable 6,000 8,000
Income tax payable 19,000 27,000
Long-term liabilities:
Notes payable 286,000 233,000
Stockholders' equity:
Common stock 298,000 263,000
Retained earnings 235,000 142,000
Total liabilities and stockholdersâ equity $ 920,000 $ 766,000
Required:
Assuming that all sales were on account, calculate the following risk ratios for 2012. (Round your intermediate and final answers to 1 decimal place. Omit the "%" sign in your response)
Risk Ratios
1. Receivables turnover ratio times
2. Average collection period days
3. Inventory turnover ratio times
4. Average days in inventory days
5. Current ratio to 1
6. Acid-test ratio to 1
7. Debt to equity ratio %
8. Times interest earned ratio times
The following income statement and balance sheet for Virtual Gaming Systems are provided.
VIRTUAL GAMING SYSTEMS
Income Statement
For the year ended December 31, 2012
Sales revenue $3,039,000
Cost of goods sold 1,951,000
Gross profit 1,088,000
Expenses:
Operating expenses 868,000
Depreciation expense 42,000
Loss on sale of land 9,400
Interest expense 16,200
Income tax expense 48,600
Total expenses 984,200
Net income $ 103,800
VIRTUAL GAMING SYSTEMS
Balance Sheet
December 31
2012 2011
Assets
Current assets:
Cash $ 217,000 $ 152,000
Accounts receivable 117,000 70,000
Inventory 116,000 138,000
Prepaid rent 28,000 26,000
Long-term assets:
Investment in bonds 130,000 0
Land 219,000 241,000
Equipment 165,000 169,000
Less: Accumulated depreciation (72,000) (30,000)
Total assets $ 920,000 $ 766,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 76,000 $ 93,000
Interest payable 6,000 8,000
Income tax payable 19,000 27,000
Long-term liabilities:
Notes payable 286,000 233,000
Stockholders' equity:
Common stock 298,000 263,000
Retained earnings 235,000 142,000
Total liabilities and stockholdersâ equity $ 920,000 $ 766,000
Required:
Assuming that all sales were on account, calculate the following risk ratios for 2012. (Round your intermediate and final answers to 1 decimal place. Omit the "%" sign in your response)
Risk Ratios
1. Receivables turnover ratio times
2. Average collection period days
3. Inventory turnover ratio times
4. Average days in inventory days
5. Current ratio to 1
6. Acid-test ratio to 1
7. Debt to equity ratio %
8. Times interest earned ratio times
Related questions
Canadian Bacon Inc. financial statements are presented in the table below.
Based on the information in the table, caluclate the firmâs the net-working capital â to-sales ratio.
Round the answers to two decimal places in percentage form.
Balance Sheet December 31, 2012
| Cash and marketable securities | $198,000 | Accounts payable | $288,000 |
| Accounts receivable | $469,000 | Notes payable | $65,000 |
| Inventories | $577,000 | Accrued expenses | $84,000 |
| Prepaid expenses | $15,700 | Total current liabilities | $437,000 |
| Total current assets | $1,259,700 | Long-term debt | $237,000 |
| Gross fixed assets | $1,954,000 | Par value and paid-in-capital | $199,000 |
| Less: accumulated depreciation | $476,000 | Retained Earnings | $1,864,700 |
| Net fixed assets | $1,478,000 | Common Equity | 2,063,700 |
| Total assets | $2,737,700 | Total liabilities and ownerâs equity | $2,737,700 |
Income Statement, Year of 2012
| Net sales (all credit) | $7,546,600.00 |
| Less: Cost of goods sold | $6,112,746.00 |
| Selling and administrative expenses | $349,000.00 |
| Depreciation expense | $145,000.00 |
| EBIT | $939,854.00 |
| Interest expense | $49,500.00 |
| Earnings before taxes | $890,354.00 |
| Income taxes | $356,141.60 |
| Net income | $534,212.40 |
