Comparative financial statements for Blossom and Pina Ltd. are shown below. BLOSSOM AND PINA LTD. Income Statement Year Ended December 31 2021 2020 Net sales $895,000 $835,000 Cost of goods sold 628.000 570,000 Gross profit 267,000 265,000 Operating expenses 164,000 160.000 Profit from operations 103.000 105,000 Other revenues and expenses Interest expense 35.000 20.000 Profit before income tax 68,000 85,000 Profit before income tax 68,000 85,000 Income tax expense 17,000 25,000 Profit $51,000 $60,000 W BLOSSOM AND PINA LTD. Balance Sheet December 31 Assets 2021 2020 2019 Cash $96,000 $86,000 $10,000 Accounts receivable 115.000 115,000 112.000 Inventories 135,000 125.000 94.000 Prepaid expenses 25,000 25.000 114,000 Land buildings, and equipment 390.000 305,000 300.000 Total assets $761.000 $656.000 $630 Prepaid expenses 25,000 25,000 114,000 Land, buildings, and equipment 390,000 305,000 300,000 Total assets $761,000 $656,000 $630,000 Liabilities and Shareholders' Equity Liabilities $110,000 $100,000 $100,000 Notes payable Accounts payable 45,000 44,000 50,000 Accrued liabilities 32,000 45,000 35,000 Bonds payable, due 2024 190,000 150.000 177.000 377,000 339.000 362,000 Total liabilities Shareholders' equity Common shares (20,000 issued) 200,000 200.000 200,000 Retained earnings 184,000 117,000 68,000 UUTUS 377,000 Total liabilities 339,000 362,000 Shareholders' equity 200.000 Common shares (20,000 issued) 200,000 200.000 Retained earnings 184,000 W 117,000 68,000 384,000 Total shareholders' equity 317,000 268.000 $761,000 $656,000 Total liabilities and shareholders' equity $630,000 Additional information: 1. 2. Seventy-five percent of the sales were on account. The allowance for doubtful accounts was $4,000 in 2021, $5,000 in 2020, and $3,000 in 2019. In 2021 and 2020, dividends of $2,000 and $8.000, respectively, were paid to the common shareholders. Cash provided by operating activities was $103,500 in 2021 and $124,000 in 2020. 3. 4 1. Seventy-five percent of the sales were on account. 2 3. The allowance for doubtful accounts was $4,000 in 2021, $5,000 in 2020, and $3,000 in 2019. In 2021 and 2020, dividends of $2,000 and $8,000, respectively, were paid to the common shareholders. Cash provided by operating activities was $103,500 in 2021 and $ 124,000 in 2020. Cash used by investing activities was $111,500 in 2021 and $32,000 in 2020. 4. 5. Solvency Ratios 8. Debt to total assets % % 9. Interest coverage times times 10. Free cash flow Profitability Ratios 11. Gross profit margin % 12 % % Profit margin 13 times times Asset turnover 14 Return on assets Profitability Ratios 11. Gross profit margin % % 12 Profit margin % % 13. Asset turnover times times 14. % Return on assets % 15. % % Return on equity 16. Earnings per share $ $ 17. % Payout ratio se
