Problem 24-3 Headland Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Headland and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2018, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $34,970 notes, which are due on June 30, 2018, and September 30, 2018. Another note of $5,970 is due on March 31, 2019, but he expects no difficulty in paying this note on its due date. Brown explained that Headlands cash flow problems are due primarily to the companys desire to finance a $300,080 plant expansion over the next 2 fiscal years through internally generated funds. The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years. HEADLAND CORPORATION BALANCE SHEET MARCH 31 Assets 2018 2017 Cash $18,120 $12,410 Notes receivable 147,220 132,930 Accounts receivable (net) 130,790 124,530 Inventories (at cost) 104,940 49,570 Plant & equipment (net of depreciation) 1,446,500 1,416,510 Total assets $1,847,570 $1,735,950 Liabilities and Owners Equity Accounts payable $79,360 $90,220 Notes payable 75,680 61,040 Accrued liabilities 8,480 2,550 Common stock (130,000 shares, $10 par) 1,296,650 1,312,800 Retained earningsa 387,400 269,340 Total liabilities and stockholders equity $1,847,570 $1,735,950 aCash dividends were paid at the rate of $1 per share in fiscal year 2017 and $2 per share in fiscal year 2018. HEADLAND CORPORATION INCOME STATEMENT FOR THE FISCAL YEARS ENDED MARCH 31 2018 2017 Sales revenue $2,994,540 $2,716,340 Cost of goods solda 1,536,450 1,415,660 Gross margin 1,458,090 1,300,680 Operating expenses 856,120 784,640 Income before income taxes 601,970 516,040 Income taxes (40%) 240,788 206,416 Net income $361,182 $309,624 aDepreciation charges on the plant and equipment of $99,960 and $101,650 for fiscal years ended March 31, 2017 and 2018, respectively, are included in cost of goods sold. (a) Compute the following items for Headland Corporation. (Round answer to 2 decimal places, e.g. 2.25 or 2.25%.) (1) Current ratio for fiscal years 2017 and 2018. (2) Acid-test (quick) ratio for fiscal years 2017 and 2018. (3) Inventory turnover for fiscal year 2018. (4) Return on assets for fiscal years 2017 and 2018. (Assume total assets were $1,705,230 at 3/31/16.) (5) Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year 2017 to 2018.