help with part B

The following financial information is for Sheridan Company, Sheridan Company Balance Sheets December 31 Assets 2022 2021 Cash $92,400 $ 85,800 Debt investments (short-term) 72,600 52,800 Accounts receivable (net) 137,280 118,800 Inventory 303,600 217,800 Prepaid expenses 33,000 30,360 Land 171,600 171,600 Building and equipment (net) 343,200 244,200 Total assets $1,153,680 $921,360 $224.400 $158.400 85,800 68.640 Liabilities and Stockholders' Equity Notes payable (current) Accounts payable Accrued liabilitles Bonds payable, due 2025 Common stock, $10 par 52.800 52.800 330,000 224400 264,000 264,000 Retained earnings 196,680 153.120 Total liabilities and stockholders equity $1.153,680 $921.360 Sheridan Company Income Statement For the Years Ended December 31 2022 2021 Net sales $1.164.240 $1.042.800 Cost of goods sold 844,800 759.000 Gross pront 319.440 283,800 Operating expenses 250.800 220,440 Net income 568,640 $63.360 Additional information: 1. 2. 3. Inventory at the beginning of 2021 was $151,800 Accounts receivable (net) at the beginning of 2021 were $113,520. Total assets at the beginning of 2021 were $871,200. No common stock transactions occurred during 2021 or 2022. All sales were on credit. 4. 5. (a) Your answer is correct Indicate, by using ratios, the change in liquidity and profitability of Sheridan Company from 2021 to 2022. (Round Current ratio, Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65, and all other answers to 1 decimal place, es. 6.8 or 6,8%) 2021 2022 LIQUIDITY Current ratio 181 :1 176 :1 Accounts receivable turnover 9.0 times 9.1 times Inventory turnover 41 times 32 times PROFITABILITY Profit margin 61 % 5.9 % % Asset turnover 116 times 1.12 times Return on assets 7.1 X 6,6 % Earnings per share 240 260 (b) Your answer is partially correct. The following are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2022, and (2) as of December 31, 2023. after giving effect to the situation. (Round debt to assets ratio to o decimal places, c.8. 15% and other answers to 1 decimal place, 63. 6,8 or 6.8%) Ratio (1) Situation 23,760 shares of common stock were sold at par on July 1, 2023. Net Income for 2023 was $71.280, and there were no dividends. All of the notes payable were paid in 2023. All other liabilities remained at their December 31, 2022, levels. At December 31, 2023, total assets were $1.185,000 The market price of common stock was $12 and $10 on December 31, 2022 and 2023, respectively. Net Income for 2023 was $71,290. (Use a simple average calculation for EPS) Return on common stockholders' equity Debt to assets ratio (2) (3) Price earnings ratio 2022 2023 Return on common stockholders' equity 26 19 % Debt to assets ratio 80 % X Price-earnings ratio 5.77 times 10.74 times