1.Construct in good form an income statement.What is the profit or loss for Reid's Rides?

Sales

270 765

Cost of goods

177 775

Gross Profit

92 990

Selling and Administrative

Rent

24 000

Utilities

13 800

Insurance

2 650

License

795

Tool Budget

1 020

Vehicle Gas

1 140

Phone

3300

Part Time Employees

7 800

Total Selling expenses

54 505

Depriciation Expense

2000

EBIT

38 485

Interest Expense

3 250

EBT

35 235

TAXES

8456.40

EAT

26778.6

2.Develop a balance sheet for Reid's Rides

Assets

Cash

10 000

Savings

35 000

Accounts R

4 500

Inventory

39 600

Parts

9 550

Tools

4800

Ttl Cur Assets

103 450

Fixed Assets

Office Equipement

19 000

Delivery Truck

22 000

Less Acc Depreciation

15 000

Net Plant/ Equipement

26000

Total Assets

129 450

Liabilities

Accounts Payable

2 500

Current Debt

10 000

Total Cur Liabilities

12 500

Long Term Liabilities

Note Payable

37 500

Total Liabilities

50 000

Retained earnings

79 450

Total Liabilities and Equity

129 450

3.Using the income statement and balance sheet you developed for Reid's Rides calculate the following ratios: Profit margin, Return on Assets, Average Collection Period, Total Asset Turnover, Current Ratio, Quick Ratio, and Times Interest Earned.In a report of approximately 500 words analyze the ratios and explain how you think Reid's Rides is doing?