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HAMES INC. Balance Sheets December 31, 2020 and 2019 2020 2019 Assets Cash $ 21,000 $ 20,000 Accounts receivable 78,000 72,000 Merchandise inventory 103,000 99,000
HAMES INC. Balance Sheets December 31, 2020 and 2019 | ||||||||||
2020 | 2019 | |||||||||
Assets | ||||||||||
Cash | $ | 21,000 | $ | 20,000 | ||||||
Accounts receivable | 78,000 | 72,000 | ||||||||
Merchandise inventory | 103,000 | 99,000 | ||||||||
Total current assets | $ | 202,000 | $ | 191,000 | ||||||
Land | 50,000 | 40,000 | ||||||||
Plant and equipment | 125,000 | 110,000 | ||||||||
Less: Accumulated depreciation | (65,000 | ) | (60,000 | ) | ||||||
Total assets | $ | 312,000 | $ | 281,000 | ||||||
Liabilities | ||||||||||
Short-term debt | $ | 18,000 | $ | 17,000 | ||||||
Accounts payable | 64,800 | 75,500 | ||||||||
Other accrued liabilities | 20,000 | 18,000 | ||||||||
Total current liabilities | $ | 102,800 | $ | 110,500 | ||||||
Long-term debt | 22,000 | 30,000 | ||||||||
Total liabilities | $ | 124,800 | $ | 140,500 | ||||||
Stockholders Equity | ||||||||||
Common stock, no par, 100,000 shares authorized 40,000 and 25,000 shares issued, respectively | $ | 74,000 | $ | 59,000 | ||||||
Retained earnings: | ||||||||||
Beginning balance | $ | 81,500 | $ | 85,000 | ||||||
Net income for the year | 51,700 | 1,500 | ||||||||
Dividends for the year | (20,000 | ) | (5,000 | ) | ||||||
Ending balance | $ | 113,200 | $ | 81,500 | ||||||
Total stockholders equity | $ | 187,200 | $ | 140,500 | ||||||
Total liabilities and stockholders equity | $ | 312,000 | $ | 281,000 | ||||||
Required:
- Calculate ROI for 2020. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
- Calculate ROE for 2020. (Round your answer to 1 decimal place.)
- Calculate working capital at December 31, 2020.
- Calculate the current ratio at December 31, 2020. (Round your answer to 2 decimal places.)
- Calculate the acid-test ratio at December 31, 2020. (Round your answer to 2 decimal places.)
- Assume that on December 31, 2020, the treasurer of Hames decided to pay $15,000 of accounts payable. What impact, if any, this payment will have on the answers you calculated for parts a-d (increase, decrease, or no effect).
- Assume that instead of paying $15,000 of accounts payable on December 31, 2020. Hames collected $15,000 of accounts receivable. What impact, if any, this receipt will have on the answers you calculated for parts a-d (increase, decrease, or no effect).
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