Current Attempt in Progress Sunland 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 Sunland 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 $35,180 notes, which are due on June 30, 2021, and September 30, 2021. Another note of $5,970 is due on March 31, 2022, but he expects no difficulty in paying this note on its due date. Brown explained that Sunland's cash flow problems are due primarily to the company's desire to finance a $299,820 plant expansion over the next 2 fiscal years through internally generated funds. The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years. Sunland Corporation Balance Sheet March 31 Assets 2021 2020 Cash $18,140 $12,490 Notes receivable 147,030 131,070 132,730 124,830 104,550 49,700 Accounts receivable (net) Inventories (at cost) Plant & equipment (net of depreciation) Total assets 1,462.750 1,417,080 $1,865,200 $1,735,170 $79,140 $91,380 Liabilities and Owners' Equity Accounts payable Notes payable Accrued liabilities 76,330 61,560 21,950 11,570 1,301,670 1,288,340 Common stock (130,000 shares, $10 par) Retained earnings 386,110 282,320 Total liabilities and stockholders' equity $1,865,200 $1,735,170 Cash dividends were paid at the rate of $1 per share in fiscal year 2020 and $2 per share in fiscal year 2021. Sunland Corporation Income Statement For the Fiscal Years Ended March 31 2021 2020 $3,017,370 $2,675,520 1,534,450 1,434,800 1,482,920 1,240,720 Sales revenue Cost of goods sold Gross margin Operating expenses Income before income taxes Income taxes (40%) Net income 859,730 778,290 623,190 462,430 249,276 184,972 $373,914 $277,458 Depreciation charges on the plant and equipment of $100,410 and $102,940 for fiscal years ended March 31, 2020 and 2021, respectively, are included in cost of goods sold. a) compute the following items for Sunland Corporation. (Round answers to 2 decimal places, eg. 2.25 or 2.25%.) 1. 2. 3. Current ratio for fiscal years 2020 and 2021. Acid-test (quick) ratio for fiscal years 2020 and 2021. Inventory turnover for fiscal year 2021. Return on assets for fiscal years 2020 and 2021. (Assume total assets were $1,676,750 at 3/31/19.) Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year 2020 to 2021. 4 5. 2020 2021 1. 1. Current ratio :1 :1 2. Acid-test (quick) ratio :1 :1 3. Inventory turnover times 4. Return on assets % % 5. 5. Percent Changes Percent Increase Sales revenue % Cost of goods sold % Gross margin % Net income after taxes %
