Marin Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock was one of the organizers of Marin and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2021, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $35,020 notes, which are due on June 30, 2021, and September 30, 2021. Another note of $6,040 is due on March 31, 2022, but he expects no difficulty in paying this note on its due date. Brown explained that Marin's cash flow problems are due primarily to the company's desire to finance a $302,480 plant expansion over the next 2 fiscal years through internally generated funds. The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years. Marin Corporation Balance Sheet March 31 2021 Assets Cash Notes receivable Accounts receivable (net) Inventories (at cost) Plant & equipment (net of depreciation) Total assets $18,370 148,910 131,240 105.170 1,447,150 $1,850,840 2020 $12,530 132,190 125.020 50,210 1,413,460 $1,733,410 Liabilities and Owners' Equity. Accounts payable Notes payable Accrued liabilities Common stock (130.000 shares, $10 par) Retained earnings Total liabilities and stockholders' equity $78,640 76,080 8,810 1,310,790 376,520 $1,850.840 $91,420 61,660 8,340 1,300,030 271,960 $1,733,410 Cash dividends were paid at the rate of $1 per share in fiscal year 2020 and $2 per share in fiscal year 2021 Marin Corporation Income Statement For the Fiscal Years Ended March 31 2021 Sales revenue Cost of goods sold- Gross margin Operating expenses Income before income taxes Income taxes (409) Net income $3.001.980 1,538,400 1,463,580 864,890 598,690 2020 $2,700,330 1,427,160 1.273,170 787,400 239,476 $359,214 485,770 194,308 $291,462 Depreciation charges on the plant and equipment of $100,330 and $101,800 for fiscal years ended March 31, 2020 and 2021, respectively, are included in cost of goods sold. Sales revenue Cost of goods solde Gross margin Operating expenses Income before income taxes Income taxes (40%) Net income Marin Corporation Income Statement For the Fiscal Years Ended March 31 2021 $3,001,980 1,538,400 1,463,580 864,890 598,690 239,476 $359,214 2020 $2,700,330 1,427,160 1,273,170 787,400 485,770 194,308 $291,462 Depreciation charges on the plant and equipment of $100.330 and $101.800 for fiscal years ended March 31, 2020 and 2021. respectively, are included in cost of goods sold. (a) Compute the following items for Marin Corporation. (Round answers to 2 decimal places, eg 225 or 225%) 1. 2 3. 4. 5. Current ratio for fiscal years 2020 and 2021. Acid-test (quick) ratio for fiscal years 2020 and 2021. Inventory turnover for fiscal year 2021. Return on assets for fiscal years 2020 and 2021 (Assume total assets were $1,694.120 at 3/31/19) Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year 2020 to 2021 2020 2021 1 Current ratio :1 :1 2. :1 Acid-test (quick) ratio Inventory turnover 3. times 4. Return on assets 5. Percent Changes Percent Increase Sales revenue 56 Cost of goods sold 56 Gross margin 56 Net income after taxes 56
