Fellsmere Corporation Presented below are the condensed balance sheets of Fellsmere Corporation at December 31, 2017 and 2016. Net income for the years ending December 31, 2016 and 2015 is $346,000 and $109,000, respectively.

	December 31, 2017	December 31, 2016
Current assets	$2,228,186	$2,544,683
Property, plant, & equipment (net)	530,589	376,647
Intangibles and other assets	131,206	118,121
Total assets	$2,889,981	$3,039,451
Current liabilities	$1,429,674	$1,003,906
Long-term obligations	3,360	7,240
Warranty and other liabilities	112,971	98,081
Total liabilities	$1,546,605	$1,109,227
Stockholders equity:
Common stock	$ 1,566	$ 501,631
Additional paid-in capital	365,986	799,483
Retained earnings	980,509	634,509
Accumulated other comprehensive loss	(4,085)	(5,489)
Total stockholders equity	$1,343,976	$1,930,224
Total liabilities and stockholders equity	$2,889,981	$3,039,451

2. Read the information about Fellsmere Corporation. Required:

(A) Did Fellsmeres current ratio increase or decrease from 2016 to 2017? Make any necessary calculations and explain your answer. Which financial statement users are most concerned with this ratio? (B) The balance sheets show a large increase in retained earnings during 2017. Identify the possible reason(s) for this increase.

ANSWER:

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midterm exam acc Review View Layout References Design Mailings Table Design Layout A- A+ MODE AR Normal Hacing abe X X Fellsmere Corporation Presented below are the condensed balance sheets of Fellsmere Corporation at December 31, 2017 and 2016. Net income for the years ending December 31, 2016 and 2015 is $346,000 and $109,000, respectively December 31, 2017 December 31, 2016 Current assets $2,228,186 $2,544,683 Property, plant, & equipment (not) 530,589 376,647 Intangibles and other assets 131,206 118.121 Total assets S2.889.981 $3.039.451 $1,429,674 3,360 112.971 $1,546,605 $1,003,906 7.240 98,081 $1.109,227 Current liabilities Long-term obligations Warranty and other liabilities Total liabilities Stockholders equity: Common stock Additional paid-in capital Retained camning Accumulated other comprehensive loss Total stockholders' equity Total liabilities and stockholders equity $ 1,566 365,986 980.509 (4,085 SI 343.976 $2.899.981 $ 501.631 799,483 634,509 (5,489) $1.930,224 52.039.451 Midterm : Ace 2301 Spring 2021 2. Read the information about Fellsmes Corporation (A) Did Fellsmere's current ratio increase or decrease from 2016 to 2017? Make any necessary calculations and explain your answer. Which financial statement users are most concerned with this ratio? (B) The balunce sheets show a large increase in retained eumings during 2017. Identify the possible TOASON() for this increase