Do It! Review 10-04

Sunland Company provides you with the following balance sheet information as of December 31, 2022.

Current assets		$11,040		Current liabilities		$11,280
Long-term assets		24,910		Long-term liabilities		13,390
Total assets		$35,950		Stockholders equity		11,280
				Total liabilities and stockholders equity		$35,950

In addition, Sunland reported net income for 2022 of $15,040, income tax expense of $3,136, and interest expense of $1,222.

	Your answer is correct.

Compute the current ratio and working capital for Sunland for 2022. (Round current ratio to 2 decimal places, e.g. 2.75. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Current ratio		enter the current ratio rounded to 2 decimal places	:1
Working capital		$enter a dollar amount

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	Your answer is correct.

Assume that at the end of 2022, Sunland used $2,880 cash to pay off $2,880 of accounts payable. Compute the new ratios. (Round current ratio to 2 decimal places, e.g. 2.75. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Current ratio		enter the current ratio rounded to 2 decimal places	:1
Working capital		$enter a dollar amount

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	Your answer is partially correct. Try again.

Compute the debt to assets ratio and the times interest earned for Sunland for 2022. (Round answers to 2 decimal places, e.g. 2.75. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Debt to assets ratio		enter the debt to assets ratio rounded to 2 decimal places	%
Times interest earned ratio		enter the Times interest earned ratio rounded to 2 decimal places	times

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