1. do you think palisade Creek has adequate liquidity and solvency? explain and show computational proof! show your work 2. is Palisades profitable? explain and use numbers from financial statements. 3. would you invest in this company? explain.

palisade Creek co income statement for the year ended may 31 20y6

sales: 5,316,205 cost of good sold:. 2991,950 gross profit:. 2,324,255

operating expenses: selling expenses:

sales salary expense:. 727,800 advertising expense:. 292,000 depreciation expense:. 14,000 store supply expense:. 9,800 misc. selling expense:. 12,600

total selling expense:. 1,056,200

administration expenses:

office salary expense:. 417,700 rent expense:. 88,700 insurance expense:. 12,000 misc. admin. expense:. 7,800

total admin. expenses:. 526,200

total operating expenses:. 1582,400 net income:. 741,855

palisade Creek co balance sheet

cash: 84,500 accts receivable: 245,875 inventory: 570,000 est. returns inventory: 50,200 prepaid insurance: 4800 store supplies: 4,000 total current assets: 959,375

property plant and equipment:

store equipment: 569,500 accum. depreciation -store equipment: -70,700

total property plant and equipment: 498,800

total assets: 1458,175

current liabilities:

accts payable: 63,150 salaries payable: 13,600 customer refunds payable: 89,270

total liabilities: 166,020

common stock: 100,000 retained earnings: 1,192,155 total stockholders equity: 1,292,155

total liabilities and stockholders equity: 1,458,175