Problem 13-04A The following financial information is for Wildhorse Company, WILDHORSE COMPANY Balance Sheets December 31 Assets 2022_ Cash $ 71,000 Debt investments (short-term) 53,000 Accounts receivable 107,000 Inventory 239,000 Prepaid expenses 30,000 Land 130,000 Building and equipment (net) 263,000 Total assets $893,000 Liabilities and Stockholders' Equity Notes payable $171,000 Accounts payable 67,000 Accrued liabilities 41,000 Bonds payable, due 2025 251,000 Common stock, $10 par 200,000 Retained earnings 163,000 Total liabilities and stockholders' equity $893,000 2021 $ 67,000 40,000 92,000 168,000 22,000 130,000 185,000 $704,000 $104,000 55,000 41,000 172,000 200,000 132,000 $704,000 WILDHORSE COMPANY Income Statements For the Years Ended December 31 2022 2021 Sales revenue $893,000 $793,000 Cost of goods sold 644,000 575,000 Gross profit 249,000 218,000 Operating expenses 190,000 161,000 Net income $ 59,000 $ 57,000 Additional information: 1. Inventory at the beginning of 2021 was $115,000. 2. Accounts receivable (net) at the beginning of 2021 were $89,000. 3. Total assets at the beginning of 2021 were $637,000. 4. No common stock transactions occurred during 2021 or 2022. 5. All sales were on account. (al) Compute the liquidity and profitability ratios of Wildhorse Company for 2021 and 2022. (Round Curent ratio, Asset turnover and Earnings per share to 2 decimal places, e.g. 15.50 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to o decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).) 2021 2022 % Change LIQUIDITY Current ratio Accounts receivables turnover times times Inventory turnover times times 2021 2022 % Change PROFITABILITY Profit margin Asset turnover times times Return on assets Earnings per shares (b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2022, and (2) as of December 31, 2023, after giving effect to the situation. (Round Debt to assets ratio to o decimal places, e.g. 15 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to O decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).) Situation 20,000 shares of common stock were sold at par on July 1, 2023. Net income for 2023 was $55,000. 1. Ratio Return on common stockholders' equity Debt to assets ratio 2. All of the notes payable were paid in 2023. All other liabilities remained at their December 31, 2022 levels. Total assets on December 31, 2023, were $890,000. 3. The market price of common stock was $9 and $12 on December 31, 2022 and 2023, respectively. Price-earnings ratio 2022 2023 % Change Return on common stockholders' equity Debt to assets ratio Price earnings ratio times times Click if you would like to show Work for this question: Open Show Work
