Condensed financial data of Neptune Co. appears below.

Neptune Co.

Comparative Balance Sheet

December 31

2020 2019 Assets

Current Assets:

Cash $71,000 $45,000 Accounts Receivables (net) 44,000 62,000 Short-Term Investment 25,000 18,000 Inventories 144,450 124,000

ACT201 Final Examination Summer 2021 Instructor: Ani Total Marks: 50

Supplies 15,280 21,000 ________ _______ Total Current Assets 299,730 270,000

Property Plant & Equipment

Land 105,000 130,000 Equipment 173,000 120,000 Building 200,000 200,000

Total Assets

Liabilities & Stockholders Equity Current Liabilities:

777,730 720,000

Accounts Payable $96,730 $82,000 Salaries & Wages Payable 19,000 15,000 ________ _______ Total Current Liabilities 115,730 97,000_

Long-Term Liabilities:

Notes Payable $260,000 $300,000 ________ ______ Total Liabilities 375,730 397,000 Stockholders Equity:

Common Stock ($10 par) $200,000 $160,000 Retained Earnings 202,000 163,000 _______ _______ Total Stockholders Equity 402,000 323,000_

Total Liabilities and Stockholders Equity

Neptune Co.

Income Statement

$777,730 $720,000

For the year ended December 31, 2020

Net Sales (90% on account) $549,000 Less:

Cost of Goods Sold 348,000 Operating Expenses excluding depreciation 84,000 Depreciation Expense 30,500 Interest Expense 6,000 Income Taxes 14,000 Gain on Sale of Plant Assets 5,500

ACT201 Final Examination Summer 2021 Instructor: Ani Total Marks: 50

Net Income

Additional Information:

$61,000

1. Equipment was purchased for $100,000 cash. In addition, equipment costing $47,000 was sold for $22,000 cash.

2. Land was sold for cash at book value.

3. Notes matured and paid off at face value of cash.

4. Cash dividend was paid in the year 2020.

5. Common Stock recently sold at $20 per share.

Instructions:

a) Prepare a statement of cash flows using the indirect method. (15) b) Compute the following ratios for 2020. (9) I. Price Earning Ratio

II. Return on Stock Holders Equity

III. Quick Ratio