P13.4A (LO 3) The following financial information is for Priscoll Company. arnr on overall Wiry Priscoll Company Balance Sheets December 31 2019 2020 Assets S 65,000 40,000 90,000 165,000 23,000 130,000 $ 70,000 55,000 104,000 230,000 25,000 130,000 260.000 Cash Debt investments (short-term) Accounts receivable Inventory Prepaid expenses Land 185,000 Building and equipment (net) $698,000 Total assets $874,000 Liabilities and Stockholders' Equity $120,000 52,000 40,000 Notes payable (short-term) Accounts payable Accrued liabilities $170,000 65,000 40,000 Bonds payable, due 2023 Common stock, $10 par Retained earnings 250,000 170,000 200,000 200,000 149,000 116,000 Total liabilitics and stockholders' equity $874,000 $698,000 Priscoll Company Income Statements For the Years Ended December 31 00 2020 2019 Sales revenue $882,000 00.0640,000 $790,000 575,000 Cost of goods sold Gross profit Operating expenses 242,000 00190,000 215,000 167,000 Net income $ 52,000 $ 48,000 Additional information: 1. Inventory at the beginning of 2019 was $115,000. 2. Accounts receivable (net) at the beginning of 2019 were $86,000. 3. Total assets at the beginning of 2019 were $660,000. 4. No common stock transactions occurred during 2019 or 2020 5. All sales were on account. Instructions a. Indicate, by using ratios, the change in liquidity and profitability of Priscoll Company from 2019 to 2020, (Note: Not all profitability ratios can be computed nor can cash-basis ratios be computed.) anln nub Problem5: St b. 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, 2020, and (2) as of December 31, 2021, after giving effect to the situation. Situation Ratio Corl. 18,000 shares of common stock were sold at par on July 1, 2021. Net income for 2021 was S54,000. 2. All of the notes payable were paid in Return on common stockholders' equity Debt to assets ratio 2021. All other liabilities remained at their December 31, 2020, levels. At December 31, 2021, total assets were $900,000. 3. The market price of common stock was $9 and $12 on December 31, 2020 and Price-earnings ratio loos 2021, respectively. Net income for 2021 was $54,000