B C D 1 w N $ 810,000 460,000 350,000 B Merry Time Lighting 2 Income Statement 3 For the Year Ended December 31, 2021 4 Net Sales Revenue 5 Cost of Goods Sold 6 Gross Profit 7 Operating Expenses: 8 Salaries and Wages Expense * 100,000 9 Depreciation Expense 20,000 10 Other Operating Expenses 120,000 11 Total Operating Expenses 12 Operating Income 13 Other Revenues and Expenses: 14 Loss on Asset Disposition (12,000) 15 Interest Expense (12,000) 16 Dividend Revenue 2,000 17 Total Other Revenues and Expenses 18 Income Before Income Taxes 19 Income Tax Expense 20 Net Income 240,000 110,000 (22,000) 88,000 28,000 60,000 $ DE 2020 $ 40,000 34,000 50,000 124,000 B 1 Merry Time Lighting 2 Comparative Balance Sheet 3 December 31, 2021 4. Assets 5 2021 6 Current Assets: 7 Cash 90,000 $ 8 Accounts Receivable 20,000 9 Merchandise Inventory 54,000 10 Total Current Assets 164,000 11 Noncurrent Assets: 12 Equity Investments 50,000 13 P,P,&E 260,000 14 Acc. Dep.-P,P,&E (60,000) 15 Total Noncurrent Assets 250,000 16 Total Assets $ 414,000 $ 17 Liabilities 18 Current Liabilities: 19 Accounts Payable 50,000 $ 20 Accrued Liabilities 25,000 21 Total Current Liabilities 75,000 22 Long-term Debt: 23 Notes Payable 100,000 24 Total Liabilities 175,000 25 Stockholders' Equity 26 Common Stock-No Par 201,000 27 Retained Earnings 44,000 28 Treasury Stock (6,000) 29 Total Stockholders' Equity 239,000 30 Total Liabilities & S.E. $ 414,000 $ 31 200,000 (40,000) 160,000 284,000 34,000 26,000 60,000 40,000 100,000 168,000 24,000 (8,000) 184,000 284,000 B D E 2 3 During the period, Merry Time Lighting disposed of property, plant, equipment. Merry Time simply discarded these assets by placing them in the dumpster and thusly did not receive any cash for their disposition. These assets had a book value of $12,000 at the time of their disposition and Merry Time recorded a loss on their disposal. Merry Time did not make any payments on outstanding notes payable during the period but they signed a new note to obtain financing Merry Time Lighting sold some of their existing shares in treasury during the period and did so at the exact same price they paid to purchase them. Merry Time Lighting also paid cash dividends to its common shareholders during the period. Use the templates below to determine the amount of tash Merry Time Lighting paid to acquire P.P. & E during the period and the amount of cash the firm transferred to shareholders in the form of dividends. The amounts reported on the statement of cash flows regarding the increase in notes payable, the decrease in treasury stock, the issuance of common stock, and the payment for equity investments should simply be for the difference in 1 these accounts reported on the company's comparative balance sheet. Cash Paid for Plant Asset Acquisition 4 Beginning Balance of P.P&E 5 Less: Book Value of Disposed P.P,&E 6 Book Value of Beginning Assets still in Service 7 8 Ending Balance of P.P.&E 9 Less: Book Value of Beginning P.P. & E Still in Service 10 Cash Paid to Acquire Plant Assets 11 12 Cash Paid for Dividend Payments 113 Beginning Retained Earnings 14 Add: Net Income 15 16 Less: Cash Dividends Paid 17 Ending Retained Earnings A B D E wN 1 Merry Time Lighting 2 Statement of Cash Flows 3 Year Ended December 31, 2021 4 Cash Flows from Operating Activities: 5 6 Adjustments: 7 B 9 10 11 12 13 Net Cash Provided by Operating Activities 14 Cash Flows from investing Activities! 15 16 17 Net Cash Used for Investing Activities 18 Cash Flows from Financing Activities: 19 20 21 22 23 Net Cash Used for Financing Activities 24 Net Increase or Decrease in Cash 25 26 Cash Balance, 12-31-20 27 Cash Balance, 12-31-21 Income Statement Balance Sheet Formulas Statement of CA Ratin na H Using the information provided (or obtained) on the previous financial statements, compute the following financial ratios for Merry Time Lighting Information which is necessary for these 1 calculations but not found on the firm's financial statements has been provided for you below 2 Accounts Receivable Balance, End of 2019 36,000 3 Inventory Balance, End of 2019 47,000 4 Market Price Per Share, End of 2021 10.00 4 56789 Weighted Average Shares Outstanding, 2021 30,000 Preferred Dividends, 2021 Sales Revenue, 2020 790,000 Cost of Goods Sold, 2020 444,000 Cash Ratio Merry Time Lighting Mery Time Lighting 10 20.22 2020 Industry Arrage 2021 11 0.80 12 Current Ratio Merry Time Lighting Merry Time Lighting 13 2021 20:20 Indverage 2091 14 2.30 15 Accounts Receivable Turnover Ratio Mem Time Lighting Merry Time Licha Industry Average 209/ 16 919 17 18.18 18 Days Sales in Receivables Meny Time Lighting Mery Time Lichame Indusse 20:21 097 2020 20 20.08 21 Inventory Turnover Ratio Men Time Licha Meny Time Lichong India 22 022 23 14.29 24 Days Sales in Inventory Income Statement Balance Sheet Formulas Statement of CF Formula Reference Table Cash Ratio - Cash/Total Current Liabilities Current Ratio - Total Current Assets/Total Current Liabilities AR Turnover Ratio - Sales Revenue / ((Current AR Prior A/R)/2) Days Sales Receivables.- 365/AR Turnover Ratio Inventory Turnover Ratio - COGS/((Current Inventory Prior Inventoryl/2) Days Sales in luvutory - 365/ Inventory Turnover Ratio Debt Ratio - Total Liabilities/Total Assets Debt to Equity Ratio - Total Liabilities Total Equity Gross Profit Percentage - Gross Profit Sales Revenue Profit Margn Ratio - Net Income Sales Revenue Earung Per Share (Net Income Preferred Dividends) / Weighted Average Shares Outstanding Price to Eaming Ratio - Market Price of Common Stock Earnings per Share 49 Ratio Analysis Writeup Gross Profit Earnin Weigh Price to Earning 18 Days Sales in Receivables Merry Time Lighting Merry Time Lighting 19 2021 2020 Industry dverage 2021 20 20.08 21 Inventory Turnover Ratio Merry Time Lighting Merry Time Lighting 22 2021 2020 Industry Average 2021 23 14.29 24 Days Sales in Inventory Merry Time Lighting Merry Time Lighting 25 2021 Industry Average 2021 2020 26 25.54 27 Debt Ratio Merry Time Lighting Merry Time Lighting 28 2021 Industry Average 2021 2020 29 0.70 30 Debt to Equity Ratio Merry Time Lighting Merry Time Lighting 31 2021 Industry Average 2021 2020 32 1.10 33 Gross Profit Percentage Merry Time Lighting Industry Average 2021 34 2027 35 0.35 36 Profit Margin Ratio Merry Time Lighting Industry Average 2091 37 2027 98 0.09 39 Earnings per Share Merry Time Lighting Industry Average 2021 40 2021 41 2.75 42 Price to Earnings Ratio w 000 In the space below express your thoughts on Merry Time Lighting's current financial position. Discussion should focus on how 1 the company's financial ratios compare to their previous ratios as well as the industry average