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Exercise 12-7A Calculate risk ratios (LO12-3) The balance sheets for Plasma Screens Corporation and additional Information are provided below. PLASMA SCREENS CORPORATION Balance Sheets December

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Exercise 12-7A Calculate risk ratios (LO12-3) The balance sheets for Plasma Screens Corporation and additional Information are provided below. PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 2021 2020 $ 116,800 78,000 95,000 4,000 $ 120,000 92,000 80,000 2,000 Assets Current assets: Cash Accounts receivable Inventory Investments Long-term assets: Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 480,000 480,000 790,000 670,000 (428,000) (268,000) $1,135,800 $1,176,000 $ $ 99,000 6,000 8,000 85,000 12,000 5,000 100,000 200,000 700,000 700,000 222,800 174,000 $1,135,800 $1,176,000 Additional Information for 2021 1. Net Income is $48,800. 2. Sales on account are $1,521,500. 3. Cost of goods sold is $1,163,750. Required: 1. Calculate the following risk ratios for 2021 (Round your answers to 1 decimal place.) Risk Ratios a. Receivables turnover ratio times b. Inventory turnover ratio times Current ratin In 1 100,000 200,000 Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 700,000 700,000 222,880 174,000 $1,135,800 $1,176,080 Additional Information for 2021 1. Net Income is $48,800. 2. Sales on account are $1,521,500. 3. Cost of goods sold is $1163,750. Required: 1. Calculate the following risk ratios for 2021 (Round your answers to 1 decimal place.) Risk Ratios a. Receivables turnover ratio b. Inventory turnover ratio C Current ratio d Acid-test ratio e Debt to equity ratio times times to 1 to 1 % 2. When we compare two companies, can one have a higher current ratio while the other has a higher acid-test ratio? O Yes O No

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