Additional information: Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more kitchen equipment. The loan would be repaid over a 4-year period. The terms of the loan provide for equal semi-annual payments of $2,500 on May 1 and November 1 of each year, plus interest of 5% on the outstanding balance.

Continuing Cookie Chronicle 13 a-c, e The comparative balance sheet of Cookie & Coffee Creations Inc. at October 31, 2023 for the years 2023 and 2022, and the income statements for the years ended October 31, 2022 and 2023, are presented below. 2023 2022 $29,074 $11,550 3,250 2,710 7,897 7,450 5,800 6,050 102,000 75,500 (25,200) (9,100) $122,821 $94,160 COOKIE & COFFEE CREATIONS INC. Balance Sheet October 31 Assets Cash Accounts receivable Inventory Prepaid expenses Equipment Accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Income taxes payable Dividends payable Salaries and wages payable Interest payable Note payable-current portion Note payable-long-term portion Preferred stock, no par, $6 cumulative- 3,000 and 2,800 shares issued, respectively Common stock, $1 par-25,930 shares issued Additional paid in capital-treasury stock Retained earnings Less treasury stock Total liabilities and stockholders' equity $2,450 7,200 27,000 1,280 0 0 $1,150 9,251 27,000 7,250 188 4,000 6,000 15,000 25,930 250 26,802 0 0 14,000 25,930 0 16,800 (500) $94,160 $122,821 2022 $462,500 208,125 254,375 COOKIE & COFFEE CREATIONS INC. Income Statement Year Ended October 31 2023 Sales $485,625 Cost of goods sold 222,694 Gross profit 262,931 Operating expenses Salaries and wages expense 147,979 Depreciation expense 17,600 Other operating expenses 48,186 Total operating expenses 213,765 Income from operations 49,166 Other expenses Interest expense 413 Loss on disposal of plant assets 2,500 Total other expenses 2,913 Income before income tax 46,253 Income tax expense 9,251 Net income $37,002 146,350 9,100 42,925 198,375 56,000 0 0 0 56,000 14,000 $42,000 Additional information: Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more kitchen equipment. The loan would be repaid over a 4-year period. The terms of the loan provide for equal semi- annual payments of $2,500 on May 1 and November 1 of each year, plus interest of 5% on the outstanding balance. Your answer is partially correct. Try again. Calculate the following ratios for 2022 and 2023. (Round current ratio to 2 decimal places, e.g. 12.61, debt to assets and gross profit rate to 0 decimal places, e.g. 12 and all other answers to 1 decimal place, e.g. 12.6%.) 2023 2022 1. Current ratio .941:1 .73:1 2. Debt to assets 44.65 % 40.28% 3. Gross profit rate 54.14% 55% 4. Profit margin 7.62% 9.08 % 5. Return on assets (Total assets at November 1, 2021, were $35,180.) 34.1 % 65% x 6. Return on common stockholders' equity (Total common stockholders' equity at November 1, 2021, was $25,180. Dividends on preferred stock were $16,800 in 2022 and $18,000 in 2023). 72.93 98.61 % % Prepare a horizontal analysis of the income statement for Cookie & Coffee Creations Inc. using 2022 as a base year. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -12.25% or (55,000), (12.25%). Round percentages to 0 decimal places, e.g. 12%.) COOKIE & COFFEE CREATIONS INC. Income Statement Year Ended October 31 2023 2022 Difference Horizontal Analysis Sales $485,625 $462,500 23125 51% Cost of goods sold 222,694 208,125 14569 71% Gross profit 262,931 254,375 8556 31% Operating expenses Salaries and wages expense 147,979 146,350 1629 1 % Depreciation expense 17,600 9,100 8500 93% Other operating expenses 48,186 42,925 5261 11 % Total operating expenses 213,765 198,375 15390 71% M Income from operations 49,166 56,000 (6834) (12) % Other expenses Interest expense 413 0 413 Loss on disposal of plant assets 2,500 0 2500 Total other expenses 2,913 0 2913 Total operating expenses 213,765 198,375 15390 71% Income from operations 49,166 56,000 (6834) (12) % Other expenses Interest expense 413 0 413 > Loss on disposal of plant assets 2,500 0 2500 Total other expenses 2,913 0 2913 Income before income tax 46,253 56,000 (9747) (17) || % Income tax expense 9,251 14,000 (4749) (.34)| % Net income $37,002 $42,000 (4998) (12)|| % COOKIE & COFFEE CREATIONS INC. Income Statement Year Ended October 31 2023 Percentage $485,625 2022 Vertical Analysis Sales 100 % $462,500 100% Cost of goods sold 222,694 45.86% 208,125 45% Gross profit 262,931 54.14% 254,375 551% Operating expenses Salaries and wages expense 147,979 30.47% 146,350 31.64% Depreciation expense 17,600 3.62% 9,100 1.971% Other operating expenses 48,186 9.921 % 42,925 9.28% Total operating expenses 213,765 44.02 % 198,375 42.89% Income from operations 49,166 10.12 % 56,000 12.11 % Other expenses Interest expense 413 .09% 0 % X Loss on disposal of plant assets 2,500 .46 || % 0 0 % X Total other expenses 2,913 .55 || % 0 0 %