QUESTION 19 Formulas for calculating Ratios: Net Income / Avg. Shareholder's Equity Current Assets / Current Liabilities Net Income / Sales Revenue Select the appropriate formula from above and calculate Boston Beer's Current Ratio for 2005 using the Financial Statements below. Then, select the correct answer. 2004 200,000 80,000 120,000 THE BOSTON BEER COMPANY INCOME STATEMENT (Inthousands) 2005 Sales Revenue 250,000 Cost of goods sold 100,000 Gross profit 150,000 Operating expenses: Advertising and promotional expenses 80,000 Administrative expenses 20.000 Total operating expenses 100,000 Income before taxes 50,000 Income taxes 10.000 Net income $ 40,000 $ 60,000 16.000 76,000 44,000 8,000 36,000 2004 45.000 22.000 3,000 70,000 20.000 15,000 05,000 THE BOSTON BEER COMPANY BALANCE SHEET (Inthousands) 2006 Cash 50,000 $ hentories 26,00D Prepaid expenses and other assets 5,000 Total current assets 80,000 Property, plant and equipment 45,000 Other assets 15,000 Total assets $ 140,000 $ Current Liabilities: Accounts payable $ 10,000 $ Taxes payable 15,000 Total current liabilities 25,000 Notes Payable 15,000 Total liabilities 40,000 Stockholders' Equity Paid-in capital 50,000 Retained Eamings 50,00D Total stockholders equity 100,000 Total liabilities and stockholders equity $ 140,000 $ 8,000 12.000 20,000 25,000 45,000 50.000 10,000 60.000 105,000 O 1.4.0 O 2.2.0 O 3.3.2 4.3.5 QUESTION 20 The cost of the transportion of inventory purchased: 1. is expensed. O 2. increases income. O 3. becomes part of the cost of inventory. O 4.reduces the sales price