from the balance sheet cash......................................................................................... $30,000 accounts receivable..............................................................150,000 inventory ..................................................................................200,000 plant assets(net of accumulated depreciation)................. 500,000 current liabilities......................................................................150,000 total stockholder's equity........................................................300,000 total assets................................................................................1,000,000 from the income statement: net sales.....................................................................................$1,500,000 costs of goods sold...................................................................1,080,000 operating expenses................................................................... 315,000 interest expenses....................................................................... 84,000 income tax expenses...................................................................6,000 net income.....................................................................................15,000 From the statement of cash flows: net cash provided by operating activities (including interest paid of $79,000)..............................................$40,000 net cash used in investing activities............................................(46,000) Financing activities: Amounts borrowed....................................................$50,000 Repayment of amounts borrowed...........................(14,000) Dividends paid...........................................................(20,000) Net cash provided by financing activities...............................16,000 Net increase in cash during the year...........................................$10,000 Instructions: a) explain how the interest expense shown in the income statement could be $84,000, when the interest payment appearing in the statement of cash flows is only $79,000. b)Compute the following (round to one decimal place): 1. current ratio 2. Quick ratio 3. Working capital 4. Debt ratio c) comment on these measurements and evaluate Rentsch, Inc.'s short-term debt-paying ability. d)Computed the following ratios (assume that the year-end amounts of total assets and total stockholders' equity also represent the average amounts throughout the year): 1. return on assets 2. return on equity. e) comment on the company's performance under these measurements. explain why the return on assets and return on equity are so different. f) Discuss (1) the apparent safety of long-term creditor's claims and (2) the prospect for Rentsch, Inc., continuing payments at the present level