Problem 12-6A Use ratios to analyze risk and profitability (LO12-3, 12-4)

[The following information applies to the questions displayed below.]

Income statements and balance sheets data for Virtual Gaming Systems are provided below.

VIRTUAL GAMING SYSTEMS ncome Statements For the year ended December 31 2019 2018 Net sales $3.555.000 $3,081,000 Cost of goods so 2489000 1,959,000 Gross profit 1,066,000 1122,000 Expenses: 964.000 Operating expenses 867,000 Depreciation expense 39.000 31.500 Loss on sale of land 8.900 Interest expense 22.500 19.500 Income tax expense 8.900 52.500 1,034,400 Total expenses 979.400 31,600 142,600 Net VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2019 Current assets S 214,500 Cash Accounts receivable 88,500 38,500 inventory Prepaid rent 4,900 Long-term assets: vestment in bonds 114,000 Land 309,000 Equipment 309,000 (121,500) Less: Accumulated depreciation Total assets $1,066,900 Liabilities and Stockholders' Equity Current liabilities Accounts payable 1 8.200 Interest payable 11.700 Income tax payable 12,900 Long-term liabilities: Notes payable 490,000 Stockholders' equity: Common stock 309,000 Retained earnings 125.100 Total liabilities and stockholders' equity $1,066,900 2018 $195,000 90,000 114, 000 12,900 114,000 219,000 279,000 82,500) $941,400 75,000 7,800 9,500 294,000 309,000 236.100 $941,400 2017 $153,000 69,000 144,000 7080 249,000 219,000 51,000) $790.080 $134,780 3,900 4.900 234,000 309,000 93,500 $790.080