Presented here are the comparative balance sheets of Hames, Inc., at December 31, 2014 and 2013. Sales for the year ended December 31, 2014, totaled $600,000.

Hames, Inc., Balance Sheets December 31, 2014 and 2013

2014

2013

Assets

Cash

$

24,000

$

21,000

Accounts receivable

78,000

72,000

Merchandise inventory

103,000

99,000

Total current assets

$

205,000

$

192,000

Land

50,000

40,000

Plant and equipment

125,000

110,000

Less: Accumulated depreciation

(65,000

)

(60,000

)

Total assets

$

315,000

$

282,000

Liabilities

Short-term debt

$

18,000

$

17,000

Accounts payable

66,000

76,000

Other accrued liabilities

20,000

18,000

Total current liabilities

$

104,000

$

111,000

Long-term debt

22,000

30,000

Total liabilities

$

126,000

$

141,000

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

$

82,000

$

85,000

Net income for the year

53,000

2,000

Dividends for the year

(20,000

)

(5,000

)

Ending balance

$

115,000

$

82,000

Total stockholders equity

$

189,000

$

141,000

Total liabilities and stockholders equity

$

315,000

$

282,000

Required:
a.	Calculate ROI for 2014. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

b.	Calculate ROE for 2014. (Round your answer to 1 decimal place. (e.g., 32.1))

c.	Calculate working capital at December 31, 2014.

d.	Calculate the current ratio at December 31, 2014. (Round your answer to 2 decimal places. (e.g., 32.16))

e.	Calculate the acid-test ratio at December 31, 2014. (Round your answer to 2 decimal places. (e.g., 32.16))

f.	Assume that on December 31, 2014, 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, 2014

	Increase
	Decrease
	No effect

b.

ROE for the year ended December 31, 2014:

	No effect
	Increase
	Decrease

c.

Working capital as at December 31, 2014:

	Decrease
	No effect
	Increase

d.

Current ratio as at December 31, 2014:

	No effect
	Increase
	Decrease

g.	Assume that instead of paying $15,000 of accounts payable on December 31, 2014. 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, 2014:

	Decrease
	Increase
	No effect

b.

ROE for the year ended December 31, 2014:

	Decrease
	Increase
	No effect

c.

Working capital as at December 31, 2014:

	No effect
	Increase
	Decrease

d.

Current ratio as at December 31, 2014:

	Increase
	No effect
	Decrease