(d) There were no issues or retirements of common stock during the year. Sales ............ (b) All sales during the year were on account Incomplete financial statements for ABC Company are as follows: Income Statement For the Year Ended December 31, 2006 $1,800,000 Less cost of goods sold Gross margin $900,000 Less operating expenses Net operating income Less interest expense 45.000 Net income before taxes Less income taxes (40%) Net income F Balance Sheet December 31, 2006 January 1, 2006 Current assets: Cash Accounts receivable, net $160,000 Inventory $280,000 Total current assets Plant and equipment, net 1.200,000 Total $250,000 Current liabilities Bonds payable, 10% Total liabilities Stockholder's equity: Common stock, $2.50 par value Retained earnings ........ 0 Total stockholders' equity Total liabilities and stockholders' equity ...... The following additional information is available about the company: (a) Selected financial ratios computed from the preceding statements are given as follows: Current ratio Quick (Acid-test) ratio Average collection period Inventory turnover Debt-to-equity ratio Earnings per share Return on total assets 2.40 to 1 1.12 to 1 24.3333 days 6.0 times 0.875 to 1 $4.05 149 (C) The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change throughout the year