Cash 15,000 Accounts payable 10,000 Wages payable 470,000 Taxes payable 500,000 Notes payable 20,000 20,000 10,000 50,000 100,000 Sales Less: Cost of goods sold Gross profit Less: Operating expenses 2,000,000 3,000,000 Accounts receivable Prepaid expenses 5,000 Total current liabilities Operating profift (EBIT) Less: Interest expense Earnings before taxes (EBT) Less: Tax expense Net income Total current assets 33,000 2,367,000 928,450 $1,538,550 1,000,000 Long-tem debt Total Sabilities Gross plant and equipment 1,500,000 Common stock 00,000 Capital paild in excess of par350,000 1,000,000 Retained eamings Net plant and equipment Total equity 1,400,000 $2,000,000 | cost of goods sold equals 40% of sales. 2|nterest expense equals 6% of the combined notes payable and long-term debt balances Total assets $2,000,000 Total debt and equity average federal and state tax rate is 35%. Indicate if any of the listed finandal statement accounts is affected by the following business transactions and whether the listed ratios will increa decrease, or remain unchanged as a result of the transaction. (Hint: Assume that the business transaction occurs exactly as stated without interoreting it further. Do not consider anv related transactions that mav occur before or after the soecified transaction. Atlanta Aeronautics Co. (AAC) sells 25,000 shares of new common stock ($1 per share par value) to new and existing shareholders for $20 per share. Check if the Account Is Affected by the Financial Ratio Ratio's Behavior Financial Account Common stock Long-term debt Operating income Capital paid-in excess of Operating profit margin Fixed assets turnover Debt ratio Basic eamings power Current ratio Inventory turnover Retained eamings Business Transaction 2 A $500,000 10-year bank loan is initiated, and the funds are placed in Atlanta Aeronautics Co. (AAC)'s checking account. Check if the Account Is Affected by the Financial Ratio Ratio's Behavior Financial Account Cash Marketable securities Long-term debt Common stock Gross plant and equipment Operating profit margin Gross profit margin Debt ratio Return on assets Times interest eamed Fixed asset turnover