Orange Electronics Warehouse (OEW) was established to sell electronics merchandise to retailers and

consumers. The company began business on November 1, 2016. Beginning Account Balances as of

January 1, 2018 are as follows:

Cash $5,000

Accounts Receivable $17,000

Inventory $15,000

Accounts Payable $19,500

Retained Earnings $17,500

The following transactions took place during the year ended December 31, 2018:

(1) January 2 New investors contributed $225,000 cash to help in launching OEW in exchange

for 75,000 shares of stock.

(2) January 31 OEW rented a building for $2,500 per month on a seven-year rental contract. A

security deposit and last month's rent was paid upon signing of the contract. Rent

is due on the 1st of every month beginning on February 1.

(3) February 1 OEW obtained a $70,000 cash loan from Easy Bank. The note has a 6% annual

interest rate and requires monthly interest-only payments (0.5% per month) on the

first day of every month beginning on March 1, 2018. The loan is due to be paid

in full in three years.

(4) February 15 OEW hired two employees who will each earn $500 bi-weekly. Employees will

be paid monthly on the first day of each month.

(5) March 1 Made its first monthly interest payment to Easy Bank for the $70,000 loan it

obtained in transaction (3) - Don't forget the rest of the year!

(6) March 15 OEW hires 2 additional workers each earning $150 per week. Employees will be

paid monthly on the first day of each month.

(7) March 15 OEW purchased a general insurance plan that will cover the company for two

years from April 1, 2018 through March 30, 2020. The policy cost $3,600 for the

entire policy period. OEW paid for the policy in cash.

(8) March 28 OEW purchased inventory consisting of laptops, cellphones, scanners, cables,

mice video games, computer accessories, etc. totaling $95,000 from various

manufacturers on account.

(9) May 30 OEW purchased shelving, racks, a forklift, a delivery truck, and other equipment

on account for $50,400. This equipment is expected to be usable for 7 years.

(10) June 1 Sold 80 of laptops in inventory to Budget Computers on account. These

computers were sold for $500 each, and they cost $225 each.

(11) June 15 Sent a check totaling $25,000 to a vendor as partial payment for the inventory

purchased in transaction (8)

(12) July 7 Sold 120 computer scanners to MicroWarehouse for $65 each on account. OEW

had previously purchased these items for $22 each. OEW also sold 466 HDMI

cables to Fried Electronics for $10 each in cash. They cost OEW $4.50 each.

(13) August 1 OEW paid $4,800 cash for radio advertisements to run through the next six

months from August 1, 2018 through January 30, 2019.

(14) August 28 Collected half the amount outstanding from Budget Computers on the sale made

in transaction (10).

(15) September 8 Paid a $4,000 dividend to shareholders.

(16) October 3 Paid the remainder of the amount due for the inventory purchased in transaction

(8), and paid for the equipment purchased in transaction (9).

(17) October 7 One of the employees hired in transaction (4) quits to take a job at Amazon. The

employee is paid for their services provided this month.

(18) October 31 Billed Wally's Mart for $57,000 of computer parts sold and shipped to them

today. The cost of these items to OEW was $32,650.

(19) November 3 OEW signed a contract with a computer parts retailer to provide 100 3-button

mice on the 15th of every month for 6 months beginning on November 15th.

OEW collected the total sales price for all six months' worth of mice when the

contract was signed, for a total of $14,400. The mice cost $8.50 each.

(20) November 15 Collected $10,000 from Budget Computers on the sale made in transaction (10).

(21) December 15 Received a bill for accounting services for $2,500. This bill will be paid on

January 15, 2019.

(22) December 30 Paid January 2019's rent payment two days early.

(23) December 31 Sold the delivery truck purchased in transaction (9) at a loss of $6,100. The truck

had cost $25,200 and OEW received $17,000 of cash.

(24) December 31 OEW issued stock to retire $25,000 of the bank loan from Easy Bank in

Transaction (3).

(25) December 31 OEW exchanged $300,000 of stock for the building it was renting. In addition,

the amounts paid on January 31st as well as the January 2019 rent payment paid

early on December 30th was agreed to by the parties to instead be used towards

the purchase of the building and the remainder of the rental agreement canceled.

Solve for

1. Return on Equity

2. Debt to Equity

3. Current Ratio

4. Quick Ratio

5. Net Operating Profit Margin

6. Gross Profit Margin

7. Operating Cash flow to Current Liabilities Ratio

8. Accounts Receivable Turnover

9. Inventory Turnover

10. Times interest earned