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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:

  1. Calculate ROI for 2020. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
  2. Calculate ROE for 2020. (Round your answer to 1 decimal place.)
  3. Calculate working capital at December 31, 2020.
  4. Calculate the current ratio at December 31, 2020. (Round your answer to 2 decimal places.)
  5. Calculate the acid-test ratio at December 31, 2020. (Round your answer to 2 decimal places.)
  6. 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).
  7. 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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