Question
(JUST NEED TO DEBT TO EQUITY RATIO SOLVED. I tried 80.1 and said that was incorrect for 2021. Thanks for the help! Income statement and
(JUST NEED TO DEBT TO EQUITY RATIO SOLVED. I tried 80.1 and said that was incorrect for 2021. Thanks for the help!
Income statement and balance sheet data for Virtual Gaming Systems are provided below.
| VIRTUAL GAMING SYSTEMS | |||||||
| Income Statements | |||||||
| For the years ended December 31 | |||||||
| 2022 | 2021 | ||||||
| Net sales | $ | 3,560,000 | $ | 3,086,000 | |||
| Cost of goods sold | 2,490,000 | 1,960,000 | |||||
| Gross profit | 1,070,000 | 1,126,000 | |||||
| Expenses: | |||||||
| Operating expenses | 965,000 | 868,000 | |||||
| Depreciation expense | 40,000 | 32,000 | |||||
| Loss on sale of land | 0 | 9,000 | |||||
| Interest expense | 23,000 | 20,000 | |||||
| Income tax expense | 9,000 | 58,000 | |||||
| Total expenses | 1,037,000 | 987,000 | |||||
| Net income | $ | 33,000 | $ | 139,000 | |||
| VIRTUAL GAMING SYSTEMS | ||||||||||||
| Balance Sheets | ||||||||||||
| December 31 | ||||||||||||
| 2022 | 2021 | 2020 | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash | $ | 216,000 | $ | 196,000 | $ | 154,000 | ||||||
| Accounts receivable | 90,000 | 91,000 | 70,000 | |||||||||
| Inventory | 140,000 | 115,000 | 145,000 | |||||||||
| Prepaid rent | 15,000 | 13,000 | 7,200 | |||||||||
| Long-term assets: | ||||||||||||
| Investment in bonds | 115,000 | 115,000 | 0 | |||||||||
| Land | 310,000 | 220,000 | 250,000 | |||||||||
| Equipment | 310,000 | 280,000 | 220,000 | |||||||||
| Less: Accumulated depreciation | (124,000 | ) | (84,000 | ) | (52,000 | ) | ||||||
| Total assets | $ | 1,072,000 | $ | 946,000 | $ | 794,200 | ||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 161,000 | $ | 76,000 | $ | 91,000 | ||||||
| Interest payable | 12,000 | 8,000 | 4,000 | |||||||||
| Income tax payable | 13,000 | 20,000 | 15,000 | |||||||||
| Long-term liabilities: | ||||||||||||
| Notes payable | 450,000 | 295,000 | 235,000 | |||||||||
| Stockholders' equity: | ||||||||||||
| Common stock | 310,000 | 310,000 | 310,000 | |||||||||
| Retained earnings | 126,000 | 237,000 | 139,200 | |||||||||
| Total liabilities and stockholders equity | $ | 1,072,000 | $ | 946,000 | $ | 794,200 | ||||||
Required: 1. Calculate the following risk ratios for 2021 and 2022: (Round your answers to 1 decimal place.)
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2. Calculate the following profitability ratios for 2021 and 2022: (Round your answers to 1 decimal place.)
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Auditing and Assurance services an integrated approach
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
14th Edition
133081605, 132575957, 9780133081602, 978-0132575959
