6. Acid-test ratio 7. Debt to equity ratio 8. Times interest earned ratio to 1 % times VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2021 Net sales Cost of goods sold Gross profit Expenses: Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Net income $3,021,000 1,947,000 1,074,000 $855,000 25,500 7,700 13,500 45,000 946,700 $ 127,300 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2021 2020 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable $183,000 78,000 $141,000 57,000 102,000 132,000 11,700 5,640 102,000 0 207,000 237,000 267,000 207,000 (64,500) (39,000) $886,200 $740,640 $ 63,000 5,400 $ 78,000 2,700 Income tax payable Long-term liabilities: Notes payable 13,500 13,700 282,000 222,000 Stockholders' equity: Common stock 297,000 297,000 Retained earnings 225,300 127,240 Total liabilities and stockholders' equity $886,200 $740,640