Con Flounder Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Flounder and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2021, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $35,010 notes, which are due on June 30, 2021, and September 30, 2021. Another note of $5,990 is due on March 31, 2022, but he expects no difficulty in paying this note on its due date. Brown explained that Flounder's cash flow problems are due primarily to the company's desire to finance a $299,860 plant expansion over the next 2 fiscal years through internally generated funds. -upport The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years. Flounder Corporation Balance Sheet March 31 Assets 2021 2020 Cash $18,340 $12,610 Notes receivable 148,550 132,170 Accounts receivable (net) 131,820 124,930 Inventories (at cost) 105,580 49,510 Plant & equipment (net of depreciation) 1.462,770 $1,867,060 1.410,000 $1,729,220 Total assets Liabilities and Owners' Equity Accounts payable $78,710 $91,680 Liabilities and Owners' Equity Accounts payable $78,710 $91,680 Notes payable 76,010 61,470 Accrued liabilities 20,550 2,050 Common stock (130,000 shares, $10 par) 1,307,670 1,300,320 Retained earnings 384,120 273,700 Total liabilities and stockholders' equity $1,867,060 $1,729,220 "Cash dividends were paid at the rate of $1 per share in fiscal year 2020 and $2 per share in fiscal year 2021. Flounder Corporation Income Statement For the Fiscal Years Ended March 31 2021 2020 $2,697,610 Sales revenue $3,025,030 Cost of goods sold 1,541.260 1.422.100 Gross margin 1.483,770 1.275,510 Operating expenses 855.170 784.280 Income before income taxes 628,600 491.230 Seco Income taxes (40%) 251,440 196,492 Net income $377,160 $294.738 Depreciation charges on the plant and equipment of $99,140 and $102,590 for fiscal years ended March 31, 2020 and 2021. respectively, are included in cost of goods sold. (a) Compute the following items for Flounder Corporation. (Round answers to 2 decimal places, e.g. 2.25 or 2.25%) 1. Current ratio for fiscal years 2020 and 2021 2. Acid-test (quick) ratio for fiscal years 2020 and 2021 3. Inventory turnover for fiscal year 2021 4. Return on assets for fiscal years 2020 and 2021. (Assume total assets were $1,693,770 at 3/31/19) 5. Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year 2020 to 2021. 2020 2021 1. Current ratio 2. Acid-test (quick) ratio 3. Inventory turnover 2020 2021 1. Current ratio 2. Acid-test (quick) ratio 3. Inventory turnover times 4. Return on assets 5. Percent Changes Percent Increase Sales revenue Cost of goods sold Gross margin Net income after taxes
