need help with questions b through d
- The comparative balance sheets of Waterways Corporation's Irrigation Installation Division for the years 2019 and 2020 and the income statements for the year 2019 and 2020 are presented below. Additional information: 85% of the sales for Waterways were credit sales. There are 5,000 shares outstanding for both years. This is a private corporation whose shares are not available to the public. WATERWAYS CORPORATION-INSTALLATION DIVISION Balance Sheets December 31 2019 Assets 2020 Current assets Cash $836,797 $746,681 680.750 542,685 702.159 Accounts receivable Work in process Inventory Prepaid expenses Total current assets Property, plant, and equipment 16,766 7,500 76,550 42.590 2,313,022 1.339.456 Land 300,000 300,000 Buildings 450.000 450.000 na La AVEV Current assets Cash $836,797 $746,681 Accounts receivable 680,750 542,685 Work in process 702,159 Inventory 16,766 7,500 Prepaid expenses 76,550 42,590 Total current assets 2,313,022 1,339,456 Property, plant, and equipment Land 300,000 300,000 Buildings 450,000 450,000 Equipment 929.400 800,200 Furnishings 40,416 40,416 Accumulated depreciation (482,523) (485,204) 1,237,293 1,105,412 Total property, plant, and equipment $3,550,315 $2,444,868 Total assets Liabilities and Stockholders' Equity Current liabilities $157,095 $128,360 Accounts payable Liabilities and Stockholders' Equity Current liabilities Accounts payable $157,095 $128,360 Income taxes payable 101,344 79,989 Wages payable 4,517 1,984 Interest payable 1,187 Other current liabilities 14,515 15,246 Revolving bank loan payable 15,000 Total current liabilities 293,658 225,579 Long-term liabilities Note payable 140,000 Total liabilities 433,658 225,579 Stockholders' equity Common stock 1.250.000 1,250,000 Retained earnings 1,866,657 969,289 Total stockholders' equity 3,116,657 2.219.289 Total liabilities and stockholders' equity $3,550,315 $2,444,868 WATEDWAVCODDODATION_INSTALLATION DIVISION WATERWAYS CORPORATION-INSTALLATION DIVISION Income Statements For the Year Ending December 31 2020 2019 Sales $5,536,077 $4,957,266 Less: Cost of goods sold 3,132,777 2,807,316 Gross profit 2,403,300 2,149,950 Operating expenses Advertising 50,000 48.000 Insurance 400,000 400,000 Salaries and wages 584,640 554,640 Depreciation 71,319 62,319 Other operating expenses 21,200 18,476 Total operating expenses 1,127,159 1,083,435 Income from operations 1,276,141 1,066,515 Other income Gain on sale of equipment 18,000 Other expenses Interest expense (12,187) Depreciation 71,319 62,319 Other operating expenses 21,200 18,476 Total operating expenses 1,127,159 1,083,435 Income from operations 1,276,141 1,066,515 Other income Gain on sale of equipment 18,000 Other expenses Interest expense (12,187) Income before income tax 1,281,954 1,066,515 Income tax expense 384,586 319,955 Net income $897,368 $746,560 (a) Prepare a horizontal analysis of the income statement using 2019 as the base year. (Do not leave amounts. Round percentage values to 1 decimal place, e.g. 52.7%. Enter negative amounts preceding the number e.g.-45 or parentheses e.g. (45).) WATERWAYS CORPORATION-INSTALLATION DIVISION Income Statement For the Year Ended December 31 (b) Prepare a vertical analysis of the income statement for 2020. (Round percentage values negative amounts using either a negative sign preceding the number e.g. -45% or po WATERWAYS CORPORATION-INSTALLATION DIVISION Income Statement For the Year Ending December 31, 2020 Amount Percent Sales $5,536,077 100 % Less: Cost of goods sold 3,132,777 de Gross profit 2,403,300 % Operating expenses Advertising 50,000 % Insurance 400,000 % Salaries and wages 584,640 % Depreciation 71.319 % % Total operating expenses 1,127,159 de Income from operations 1,276,141 Other income % Gain on sale of equipment 18,000 Other expenses % Interest expense (12,187) % Income before income tax 1,281,954 % Income tax expense 384,586 % Net income $897,368 (c) Calculate the following ratios for 2020 and indicate whether the ratio is a liquidity, solvency, or profitability ratio. turnover ratio, Accounts receivable turnover ratio, Current ratio and Earnings per share to 2 decimal place Round Average collection period, Debt to assets ratio, Profit margin, Return on assets ratio, Return on com equity ratio and Times interest earned ratio to 1 decimal place, e.g. 15.2 or 15.2%. Use 365 days for calcul Type Type (1) Asset turnover ratio times TO (2) Accounts receivable turnover ratio times (3) Average collection period days (4) Current ratio 1 (5) Debt to assets ratio % O DO ORLD DOO (6) Earnings per share $ (7) Profit margin %6 (8) Return on assets ratio %6 (9) Return on common stockholders' equity ratio times (10) Times interest earned ratio (d) Comment on your findings. (d) Comment on your findings. Liquidity The company's liquidity is Solvency : The company's solvency is very Profitability : The company's profitability is Overall By all measures the company appears to be both financially ts ratio % mon stockholders' equity ratio % earned ratio times dings. The company's liquidity i strong weak The company's solvency is very The company's profitability is By all measures the company appears to be both financially Media ast saved 35 minutes ago Attempts: MacBook Air 5. e company's liquidity is he company's solvency is very high low he company's profitability is By all measures the company appears to be bot dings. The company's liquidity is The company's solvency is very The company's profitability is strong weak By all measures the company appears to be both financial d Media Last saved 35 minutes ago. MODRA 4 The company's profitability is By all measures the company appears to be both financially sound and profitable weak and unprofitable Media
