Balance sheet

Financial information for Ernie Bishop Company is presented below. ERNIE BISHOP COMPANY Balance Sheets December 31 Assets 2013 2012 Cash $ 70,000 $ 65,000 Shortterm investments 52,000 40,000 Receivables (net) 98,000 80,000 125,000 135,000 29,000 23,000 Land 130,000 130,000 Building and equipment (net) 168,000 175,000 $672,000 $648,000 $100,000 100,000 48,000 42,000 Inventory Prepaid expenses Liabilities and Stockholders' Equity Notes payable Accounts payable Accrued liabilities 44,000 40,000 Bonds payable, due 2016 150,000 150,000 Common stock, $10 par 200,000 200,000 Retained earnings 130,000 116,000 $672,000 $648,000 ERNIE BISHOP COMPANY Income Statement For the Years Ended December 31 2013 Net sales 2012 $858,000 $798,000 611,000 575,000 Gross profit 247,000 223,000 Operating expenses 204,500 181,000 Net income $ 42,500 $ 42,000 Cost of goods sold Additional information: 1. Inventory at the beginning of 2012 was $118,000. 2. Total assets at the beginning of 2012 were $632,000. 3. No common stock transactions occurred during 2012 or 2013. 4. All sales were on account. 5. Receivables (net) at the beginning of 2012 were $88,000. (a) Indicate, by using ratios, the change in liquidity and profitability of Ernie Bishop Company from 2012 to 2013. (Round Earnings per share to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .) 2012 LIQUIDITY Current Acidtest Receivables turnover Inventory turnover PROFITABILITY Profit margin Asset turnover Return on assets Earnings per share 2013 Change :1 :1 times times :1 :1 times times % times % % times % $ $ (b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2013, and (2) as of December 31, 2014, after giving effect to the situation. Net income for 2014 was $50,000. Total assets on December 31, 2014, were $700,000. Situation (1) Ratio 18,000 shares of common stock were sold at par on July 1, 2014. Return on common stockholders' equity (2) All of the notes payable were paid in 2014. The only change in liabilities was that the notes payable were paid. Debt to total assets (3) Market price of common stock was $9 on December 31, 2013, and $12.50 on December 31, 2014. Priceearnings ratio 2013 Return on common stockholders' equity Debt to total assets Priceearnings ratio 2014 % % times Change % % times Don't show me this message again for the assignment Click if you would like to Show Work for this question: Open Show Work