Presented here are the comparative balance sheets of Hames, Inc., at December 31, 2017 and 2016. Sales for the year ended December 31, 2017, totaled $590,000.

HAMES, INC.,

Balance Sheets

December 31, 2017 and 2016

2017 2016

Assets

Cash $ 22,000 $ 20,000

Accounts receivable 78,000 72,000

Merchandise inventory 103,000 99,000

Total current assets $ 203,000 $ 191,000

Land 50,000 40,000

Plant and equipment 125,000 110,000

Less: Accumulated depreciation (65,000 ) (60,000 )

Total assets $ 313,000 $ 281,000

Liabilities

Short-term debt $ 18,000 $ 17,000

Accounts payable 65,200 75,500

Other accrued liabilities 20,000 18,000

Total current liabilities $ 103,200 $ 110,500

Long-term debt 22,000 30,000

Total liabilities $ 125,200 $ 140,500

Stockholders Equity

Common stock, no par, 100,000 shares authorized

40,000 and 25,000 shares issued, respectively $ 74,000 $ 59,000

Retained earnings:

Beginning balance $ 81,500 $ 85,000

Net income for the year 52,300 1,500

Dividends for the year (20,000 ) (5,000 )

Ending balance $ 113,800 $ 81,500

Total stockholders equity $ 187,800 $ 140,500

Total liabilities and stockholders equity $ 313,000 $ 281,000

Required:

a. Calculate ROI for 2017. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

b. Calculate ROE for 2017. (Round your answer to 1 decimal place.)

c. Calculate working capital at December 31, 2017.

d. Calculate the current ratio at December 31, 2017. (Round your answer to 2 decimal places.)

e. Calculate the acid-test ratio at December 31, 2017. (Round your answer to 2 decimal places.)

f. Assume that on December 31, 2017, the treasurer of Hames, Inc., decided to pay $15,000 of accounts payable. What impact, if any, this receipt will have on the answers you calculated for requirements a-d (increase, decrease, or no effect)

a. ROI for the year ended December 31, 2017:

Decrease

No effect

Increase

b. ROE for the year ended December 31, 2017:

Decrease

Increase

No effect

c.Working capital as at December 31, 2017:

Increase

No effect

Decrease

d. Current ratio as at December 31, 2017:

Increase

Decrease

No effect

g. Assume that instead of paying $15,000 of accounts payable on December 31, 2017. Hames, Inc., collected $15,000 of accounts receivable. What impact, if any, this receipt will have on the answers you calculated for requirements a-d (increase, decrease, or no effect)

a. ROI for the year ended December 31, 2017:

Increase

Decrease

No effect

b. ROE for the year ended December 31, 2017:

Increase

Decrease

No effect

c. Working capital as at December 31, 2017:

Decrease, or

Increase, or

No effect.

d. Current ratio as at December 31, 2017:

No effect or increase or decrease