BLOSSOM COMPANY Balance Sheets December 31 Assets 2022 Cash $ 72,000 Debt investments (short-term) 54,000 Accounts receivable 109,000 Inventory 235,000 Prepaid expenses 26,000 Land 134,000 Building and equipment (net) 259,000 Total assets $889,000 Liabilities and Stockholders' Equity Notes payable $170,000 Accounts payable 66,000 Accrued liabilities 41,000 Bonds payable, due 2025 249,000 Common stock, $10 par 198,000 Retained earnings 165,000 Total liabilities and stockholders' equity $889,000 - 2021 $ 67,000 39,000 92,000 164,000 27,000 134,000 185,000 $708,000 $102,000 54,000 41,000 171,000 198,000 142,000 $708,000 BLOSSOM COMPANY Income Statements For the Years Ended December 31 2022 2021 Sales revenue $898,000 $785,000 Cost of goods sold 643,000 576,000 Gross profit 255,000 209,000 Operating expenses 198,000 159,000 Net income $ 57,000 $50,000 Additional information: Net income $ 57,000 $50,000 Additional information: 1. Inventory at the beginning of 2021 was $116,000. 2. Accounts receivable (net) at the beginning of 2021 were $89,000. 3. Total assets at the beginning of 2021 were $631,000. 4. No common stock transactions occurred during 2021 or 2022. 5. All sales were on account. (a1) Compute the liquidity and profitability ratios of Blossom Company for 2021 and 2022. (Round Curent ratio, Asset turnover and Earnings per share to 2 decimal places, e.g. 15.50 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to o decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).) 2021 2022 % Change LIQUIDITY Current ratio -9.32% 1.97 :1 8.7 times 4.1 times 1.79 :1 8.9 times Accounts receivables turnover 3.0 % -21.7% Inventory turnover 3.2 times 2021 2022 % Change PROFITABILITY Profit margin 6.4 % 6.3 % -0.3% Asset turnover 1.17 times 1.12 times -4.09 Return on assets 7.5 % 7.1 % -4.4% Earnings per share $ 2.53 $ 2.88 (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, 2022, and (2) as of December 31, 2023, after giving effect to the situation. (Round Debt to assets ratio to o decimal places, e.g. 15 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to o decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).) Inventory turnover 4.1 times 3.2 times -21.7% 2021 2022 % Change PROFITABILITY Profit margin 6.4 % 6.3 % -0.3% Asset turnover -4.09% times 7.5 % 1.12 times 7.1% Return on assets Earnings per share $ 2.53 2.88 14% (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, 2022, and (2) as of December 31, 2023, after giving effect to the situation. (Round Debt to assets ratio to o decimal places, e.g. 15 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to o decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).) 1. Situation 19,000 shares of common stock were sold at par on July 1, 2023. Net income for 2023 was $53,000. Ratio Return on common stockholders' equity Debt to assets ratio 2. All of the notes payable were paid in 2023. All other liabilities remained at their December 31, 2022 levels. Total assets on December 31, 2023, were $894,000. 3. The market price of common stock was $9 and $13 on December 31, 2022 and 2023, respectively. Price-earnings ratio 2022 2023 % Change Return on common stockholders' equity Debt to assets ratio % Price earnings ratio times times Click if you would like to Show Work for this question: Open Show Work Question Attempts: 0 of 2 used