1. The financial statements of Gaines Company appear below: GAINES COMPANY Comparative Balance Sheet December 31, Assets 2013 2012 Cash................................................................................................... $ 25,000 $ 40,000 Short-term investments...................................................................... 15,000 60,000 Accounts receivable (net).................................................................. 50,000 30,000 Inventory........................................................................................... 50,000 70,000 Property, plant and equipment (net).................................................. 260,000 300,000 Total assets .................................................................................. $400,000 $500,000 Liabilities and stockholders' equity Accounts payable............................................................................... $ 20,000 $ 30,000 Short-term notes payable................................................................... 30,000 90,000 Bonds payable................................................................................... 90,000 160,000 Common stock................................................................................... 150,000 150,000 Retained earnings.............................................................................. 110,000 70,000 Total liabilities and stockholders' equity...................................... $400,000 $500,000 GAINES COMPANY Income Statement For the Year Ended December 31, 2013 Net sales............................................................................................. $400,000 Cost of goods sold............................................................................. 240,000 Gross profit........................................................................................ 160,000 Expenses Operating expenses...................................................................... $42,000 Interest expense........................................................................... 18,000 Total expenses........................................................................ 60,000 Income before income taxes.............................................................. 100,000 Income tax expense........................................................................... 30,000 Net income......................................................................................... $ 70,000 Additional information: a. Cash dividends of $23,000 were declared and paid in 2013. b. Weighted-average number of shares of common stock outstanding during 2013 was 30,000 shares. c. Market value of common stock on December 31, 2013, was $21 per share. Required: Using the financial statements and additional information, compute the following ratios for Gaines Company for 2013. Show all computations. (20 min.) 1. Current ratio 1.8:1 (90,000/50,000) 2. Return on common stockholders' equity _________. 3. Price-earnings ratio _________. 4. Acid-test ratio _________. 5. Receivables turnover _________. 6. Times interest earned _________. 7. Profit margin _________. 8. Days in inventory _________. 9. Payout ratio 32.8% 10. Return on assets _________.