Comparative Balance Sheet This Year Last Year Assets Current assets: Cast $ 90, 080 $ 200,080 Temporary investments 50,080 Accounts receivable, net 650, 608 406, 080 Inventory 1,306, 080 300, 080 Prepaid expenses 20, 080 20, 080 Total current assets 2, 060, 080 1, 470, 080 Plant and equipment, net 1, 940, 080 1, 830, 080 Total assets $ 4, 000,080 $ 3,300,080 Liabilities and Shareholders' Equity Liabilities: Current liabilities $ 1, 100, 080 $ 600, 086 Bonds payable, 12% 750, 080 750,080 Total liabilities 1, 856, 080 1, 350,680 Shareholders' equity: Preferred shares, 4,080, $4 no par 200, 680 200, 808 Common shares, 50,080 500, 080 500, 080 Retained earnings 1, 450, 080 1, 250, 080 Total shareholders' equity 2, 150, 080 1, 950, 080 Total liabilities and shareholders' equity $ 4, 000, 080 $ 3, 300,080 MODERN BUILDING SUPPLY Comparative Income Statement and Reconciliation of Retained Earnings This Year Last Year Sales $7, 600, 080 $6, 060, 080 Cost of goods sold 5, 400, 080 4, 806,080 Gross margin 1, 600, 080 1, 260,606 Selling and administrative expenses 970, 080 710,080 Operating income 630, 080 490,080 Interest expense 90, 080 90, 080 Net income before taxes 540, 080 400, 808 Income taxes (40%) 216,080 160,080 Net income 324, 080 240, 080 dends pa Preferred dividends 16,080 16,808 Common dividends 108, 808 60, 808 Total dividends paid 124,080 76,080 Net income retained 200, 808 164,080 Retained earnings, beginning of year 1, 250, 080 1, 086,080 Retained earnings, end of year $1, 450, 080 $1, 250, 080 During the past year, the company has expanded the number of lines that It carries In order to stimulate sales and Increase profits. It has also moved aggressively to acquire new customers. Sales terms are 2/10, n/30. All sales are on account. Assume that the following ratios are typical of companies in the building supply industry:During the past year, the company has expanded the number of lines that it carries In order to stimulate sales and Increase profits. It has also moved aggressively to acquire new customers. Sales terms are 2/10, n/30. All sales are on account. Assume that the following ratios are typical of companies In the building supply Industry: Current ratio 2.5 Acid-test ratio 1.2 Average collection period 18 days Average sale period 50 days Debt-to-equity ratio 8.75 Times interest earned ratio 6.0 Return on total assets Price-earnings ratio 9