Problem 24-3 Wildhorse 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 Wildhorse 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 $34,980 notes, which are due on June 30, 2018, and September 30, 2018. Another note of $6,060 is due on March 31, 2019, but he expects no difficulty in paying this note on its due date. Brown explained that Wildhorses cash flow problems are due primarily to the companys desire to finance a $298,500 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. WILDHORSE CORPORATION BALANCE SHEET MARCH 31 Assets 2018 2017 Cash $18,050 $12,590 Notes receivable 147,320 130,790 Accounts receivable (net) 132,920 125,940 Inventories (at cost) 105,990 49,780 Plant & equipment (net of depreciation) 1,445,010 1,412,350 Total assets $1,849,290 $1,731,450 Liabilities and Owners Equity Accounts payable $78,710 $90,810 Notes payable 76,570 61,260 Accrued liabilities 3,810 1,880 Common stock (130,000 shares, $10 par) 1,301,250 1,293,620 Retained earningsa 388,950 283,880 Total liabilities and stockholders equity $1,849,290 $1,731,450 aCash dividends were paid at the rate of $1 per share in fiscal year 2017 and $2 per share in fiscal year 2018. WILDHORSE CORPORATION INCOME STATEMENT FOR THE FISCAL YEARS ENDED MARCH 31 2018 2017 Sales revenue $3,000,740 $2,718,060 Cost of goods solda 1,528,300 1,433,820 Gross margin 1,472,440 1,284,240 Operating expenses 868,470 779,910 Income before income taxes 603,970 504,330 Income taxes (40%) 241,588 201,732 Net income $362,382 $302,598 aDepreciation charges on the plant and equipment of $99,500 and $102,710 for fiscal years ended March 31, 2017 and 2018, respectively, are included in cost of goods sold. (a) Compute the following items for Wildhorse 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 $1,690,000 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. 2017 2018 (1) Current ratio :1 :1 (2) Acid-test (quick) ratio :1 :1 (3) Inventory turnover times (4) Return on assets % % (5) Percent Changes Percent Increase Sales revenue % Cost of goods sold % Gross margin % Net income after taxes %