Problem 14-4A The following financial information is for Priscoll Company. Priscoll Company Balance Sheets December 31 Assets 2020 2019 Cash Debt investments (short-term) Accounts receivable Inventory Prepaid expenses $ 126,700 99,550 188,240 416,300 45,250 235,300 470,600 $1,581,940 $ 117,650 72,400 162,900 298,650 41,630 235,300 334,850 $1,263,380 Land Building and equipment (net) Total assets Liabilities and Stockholders' Equity Notes payable (short-term) Accounts payable Accrued liabilities Bonds payable, due 2023 Common stock, $10 par Retained earnings Total liabilities and stockholders' equity $307,700 117,650 72,400 452,500 362,000 269,690 $1,581,940 $217,200 94,120 72,400 307,700 362,000 209,960 $1,263,380 2019 Priscoll Company Income Statement For the Years Ended December 31 2020 Sales revenue $1,596,420 Cost of goods sold 1,158,400 Gross profit 438,020 Operating expenses 343,900 Net income $ 94,120 $1,429,900 1,040,750 389,150 302,270 $ 86,880 Additional information: 1. 2. 3. Inventory at the beginning of 2019 was $208,150. Accounts receivable (net) at the beginning of 2019 were $155,660. Total assets at the beginning of 2019 were $1,194,600. No common stock transactions occurred during 2019 or 2020. All sales were on account. 4. 5. Indicate, by using ratios, the change in liquidity and profitability of Priscoll Company from 2019 to 2020. (Round Current ratio, Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65, and all other answers to 1 decimal place, e.g. 6.8 or 6.8%.) 2019 2020 LIQUIDITY Current ratio : 1 : 1 Accounts receivable turnover times times Inventory turnover times times PROFITABILITY Profit margin % % Asset turnover times times Return on assets % % Earnings per share $ $ LINK TO TEXT 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. (Round debt to assets ratio to O decimal places, e.g. 15% and other answers to 1 decimal place, e.g. 6.8 or 6.8%.) Situation Ratio (1) 32,580 shares of common stock were sold at par on July 1, 2021. Net income for 2021 was $97,740. Return on common stockholders' equity (2) All of the notes payable were paid in 2021. All other liabilities remained at their December 31, 2020, levels. At December 31, 2021, total assets were $1,629,000. Debt to assets ratio (3) The market price of common stock was $16 and $22 on December 31, 2020 and 2021, respectively. Net income for 2021 was $97,740. Price-earnings ratio 2020 2021 Return on common stockholders' equity % % Debt to assets ratio % % Price-earnings ratio times times