Question 3 of 6 - / 1 = View Policies Current Attempt in Progress Sheridan 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 Sheridan and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2021, Daniel Brown approached the Topeka National Bank asking for a 24-month extension on two $35,140 notes, which are due on June 30,2021, and September 30,2021. Another note of $5.960 is due on March 31, 2022, but he expects no difficulty in paying this note on its due date. Brown explained that Sheridan's cash flow problems are due primarily to the company's desire to finance a $297,340 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. Sheridan Corporation Balance Sheet March 31 Assets Cash Notes receivable Accounts receivable (net) Inventories (at cost) Plant & equipment (net of depreciation) Total assets 2021 $18,250 148,470 131,230 104,800 1.457,040 $1,859,790 2020 $12,400 131,930 126,700 50.130 1.426.050 $1.747,210 Liabilities and Owners' Equity. Accounts payable Notes payable Accrued liabilities Common stock (130,000 shares, $10 par) Retained earnings Total liabilities and stockholders' equity $78,750 76,240 24.560 1,289,340 390,900 $1,859.790 $90,290 61.920 22,040 1.292,930 280,030 $1,747,210 *Cash dividends were paid at the rate of $1 per share in fiscal year 2020 and $2 per share in fiscal year 2021 Sales revenue Cost of goods sold Gross margin Operating expenses Income before income taxes Income taxes (409) Net income Sheridan Corporation Income Statement For the Fiscal Years Ended March 31 2021 $2,986,270 1,517,030 1,469,240 852.550 616,690 246,676 $370.014 2020 $2,689,940 1,418,250 1,271,690 776.720 494,970 197,988 $296,982 Depreciation charges on the plant and equipment of $99.470 and $101,870 for fiscal years ended March 31, 2020 and 2021. respectively, are included in cost of goods sold. (a) Compute the following items for Sheridan Corporation. (Round answers to 2 decimal places, eg. 2.25 or 2.25%.) 1. Current ratio for fiscal years 2020 and 2021 2 Acid-test (quick) ratio for fiscal years 2020 and 2021. 3. Inventory turnover for fiscal year 2021. 4. Return on assets for fiscal years 2020 and 2021. (Assume total assets were $1,700,190 at 3/31/19.) 5. Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year 2020 to 2021. 2020 2021 1. Current ratio -1 .1 2 Acid-test (quick) ratio :1 .1 3. Inventory turnover times 4. Return on assets 96 96 5. Percent Changes Percent Increase Sales revenue 96 Cost of goods sold 96 Gross margin 96 Net income after taxes 96
