Gamma Industries Consolidated Statement of Income (Unaudted) December 31, 2020 Gamma Industries Consolidated Balance Sheet (Unaudited) December 31, 2020 Assets Net Sales* Cost of Sales Gross Profit SGA Expenses Operating Income Interest Expense Income Before Taxes Income Tax Provision Net Income $2,347,522 1,383,395 964,127 748,356 215,772 10,789 204,983 71,744 133.239 Current Assets Cash and equivalents Accounts Receivable, net Inventory Prepaid Expenses Total Current Assets $997,697 349,194 10,211,723 611,089 12,169,703 Liabilities & Stockholders' Equity Current Liabilities Accounts Payable Accrued Liabilities Income Taxes Payable Total Current Liabilities $2,601,495 1,430,822 442,254 4,474,572 Notes Payable Total Liabilities $7,466,291 11,940,862 Basic EPS $1.33 Property, Plant & Equipment Land and Buildings Equipment and Vehicles IT Hardware and Software Accumulated Depreciation & Amortization Property, Plant & Equipment, net $1,707,559 1,758,785 1,827,088 (1,109,913) 4,183,518 *Credit sales are equal to 85% of net sales Stockholders' Equity Common Stock, 100,000 shares issued & outstanding Additional Paid-in-Capital Accumulated Other Comprehensive Income Retained Earnings Total Stockholders' Equity $200,000 1,560,000 638,703 2,013,656 4,412,359 Total Assets $16,353,222 Total Liabilities & Stockholders' Equity $16,353,222 Assuming a 360 day year, Gamma's days outstanding in accounts receivables is _days. a. 63.00 b. 63.88 c. 66.94 %. Gamma's net profit margin is a. 3.49 b. 5.68 c. 8.45 %. Gamma's return on equity (ROE) is a. 0.81 b. 3.02 c. 4.57 Gamma's quick ratio is a. 0.30 b. 2.72 c. 4.62 Assume Gamma's usual credit terms are 2/10, net 30. Gamma's days outstanding in accounts receivables suggests bad debts are likely _ to accounts receivable. a. Immaterial b. Material c. Neither A nor B: Bad debts have no relationship with accounts receivable Gamma's profit margin, relative to the industry of average of 14%, suggests a _ level of detection risk a. Low 6. High c. Neither A nor B: profit margin is irrelevant to assessing detection risk