At the end of 2013, the following accounting information is available for Bainbridge and Crist Companies:

Required
a. Set up the preceding spreadsheet. Complete the balance sheet and income statement. Use Excel formulas for rows that “total” on the balance sheet and for gross margin and net income on the income statement.
b. Calculate the designated ratios using Excel formulas.
c. Which company is more likely to be able to pay its current liabilities?
d. Which company carries a greater financial risk?
e. Which company is more profitable from the stockholders’ perspective?
f. Based on profitability alone, which company performed better?
g. Assume that sales increased 10 percent and that the additional sales were made on account. Adjust the balance sheet and income statement for the effects. Notice that Retained Earnings will also need to be adjusted to keep the balance sheet in balance. What is the resultant effect on theratios?

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Classified Balance Sheet Assets Bainbridge Crist Multistep Income Statement Bainbridge Crist Sales Cost of Goods Sold Current Assets Cash Accounts Receivable Inventory Total Current Assets Property, Plant and Equipment 18,000 22,500 Gross Margin 19,000 19,500 Operating Expenses 14,000 18,000 Net Income 51.000 60.000 500.000 575.000 170.000 200.000 330.000 375.000 285.000 345.000 45.000 30.000 RATIOS 1.46 46.12% 53.88% 66.00% 9.00% 18.87% 35.02% 0.85 82.83% 17.17% 65.22% 5.22% 13.04% 75.95% an 52,500 50,000 Current Ratio Building 135,000 120,000 Debt to Total Assets Gross Margin Percentage Return on Assets Total Property, Plant and Equipmei 187,500 170,000 Equity to Total Assets Total Assets 238,500 230,000 Return on Sales Liabilities Return on Equity Current Liabilities Accounts Payable Wages Payable Total Current Liabilities Long-Term Liabilities Notes Payable 20.000 52.500 5.000 18.000 35,000 70,500 75.000 120.000 Total Liabilities 110,000 190,500 Equitv Contributed Capital Retained Earnings Total Equity 30.000 9.500 98,500 30,000 128,500 39,500 Total Liabiliti es and Equity 238,500 230,000