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accountingexercises.docx|
Income statement and balance sheet data for Virtual Gaming Systems are provided below. |
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VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31 |
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2013 |
2012 |
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Sales revenue |
$3,510,000 |
$3,036,000 |
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Cost of goods sold |
2,480,000 |
1,950,000 |
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Gross profit |
1,030,000 |
1,086,000 |
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Expenses: |
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Operating expenses |
955,000 |
858,000 |
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Depreciation expense |
30,000 |
27,000 |
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Loss on sale of land |
0 |
8,000 |
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Interest expense |
18,000 |
15,000 |
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Income tax expense |
8,000 |
48,000 |
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Total expenses |
1,011,000 |
956,000 |
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Net income |
$ 19,000 |
$ 130,000 |
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VIRTUAL GAMING SYSTEMS Balance Sheet December 31 |
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2013 |
2012 |
2011 |
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Assets |
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Current assets: |
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Cash |
$ 201,000 |
$186,000 |
$144,000 |
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Accounts receivable |
75,000 |
81,000 |
60,000 |
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Inventory |
125,000 |
105,000 |
135,000 |
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Prepaid rent |
14,000 |
12,000 |
6,000 |
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Long-term assets: |
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Investment in bonds |
105,000 |
105,000 |
0 |
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Land |
300,000 |
210,000 |
240,000 |
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Equipment |
300,000 |
270,000 |
210,000 |
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Less: Accumulated depreciation |
(99,000) |
(69,000) |
(42,000) |
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Total assets |
$1,021,000 |
$900,000 |
$753,000 |
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Liabilities and Stockholders' Equity |
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Current liabilities: |
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Accounts payable |
$ 78,000 |
$ 66,000 |
$ 81,000 |
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Interest payable |
9,000 |
6,000 |
3,000 |
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Income tax payable |
12,000 |
15,000 |
14,000 |
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Long-term liabilities: |
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Notes payable |
400,000 |
285,000 |
225,000 |
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Stockholders' equity: |
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Common stock |
300,000 |
300,000 |
300,000 |
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Retained earnings |
222,000 |
228,000 |
130,000 |
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Total liabilities and stockholders’ equity |
$1,021,000 |
$900,000 |
$753,000 |
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1.
value: 5.00 points
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Required: |
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1. |
Calculate the following risk ratios for 2012 and 2013 (Round your answers to 1 decimal place. Omit the "%" sign in your response): |
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2012 |
2013 |
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Receivables turnover ratio |
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times |
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times |
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Inventory turnover ratio |
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times |
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times |
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Current ratio |
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to 1 |
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to 1 |
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Debt to equity ratio |
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% |
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% |
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check my work eBook Links (2) references
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Worksheet |
Learning Objective: 12-03 Use ratios to analyze a company’s risk. |
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Difficulty: Hard |
Learning Objective: 12-04 Use ratios to analyze a company’s profitability. |
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2.
value: 5.00 points
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2. |
Calculate the following profitability ratios for 2012 and 2013 (Round your answers to 1 decimal place. Omit the "%" sign in your response): |
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2012 |
2013 |
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Gross profit ratio |
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% |
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% |
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Return on assets |
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% |
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% |
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Profit margin |
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% |
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% |
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Asset turnover |
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times |
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times |
