Question 5 [5 points] Use United Corporation's financial statements to compute the acid-test ratio, and indicate whether the change from year to year is favourable or unfavourable. For your analysis, assume that all other things have remained constant. Apply your analysis in very general terms. All values should be accurate to at least two decimal places United Corporation Income Statement For Years Ended December 31, 2014, 2013, and 2012 2014 2013 2012 .$1,471,80051,413,800$1,230,800 Cost of goods sold. 171.100 396,200 406,800 Gross profit from sales. 1,000,800 1,017,400 824,000 Operating expenses..... 280,200 287.400 295,500 Income from operations. 720,600 730,000 628.500 Interest expense.. 2,000 1,750 1,750 Income before taxes 718,600 728.250 626,750 Income taxes... 150,900 120,900 69,200 Net income ... $558,700 $607,350 $457.550 United Corporation Balance Sheet December 31, 2014, 2013, and 2012 Assets 2014 2013 2012 $21,800 $22,900 $25.200 Cash........... Short-term investments..... 13.000 15,000 14,000 Accounts receivable, net.... 26,300 32,000 30,400 Merchandise inventory ..... 80,600 79,500 91,100 Prepaid expenses.. 8,900 7,900 9.400 Notes receivable, due in 2017 6.500 6,500 7,500 Plant assets, net. 406,000 378,000 441,000 Total assets .... $563,100 $541,800 $618,800 Liabilities and Equity Accounts payable $14,500 $13,700 $13,300 Salaries payable... 18.800 16,200 19.700 Income taxes payable.... 33.050 31,300 38.950 Long-term note payable secured by mortgage on plant assets 229,000 213,000 218,000 Share capital, 200,000 shares 140,000 150,000 190,000 Retained earnings. 27,750 117,600 138,650 Total liabilities and equity .. $563,100 $541,800 $ $618,600 Ratio 2014 2013 Analysis Acid-test ratio.. (select one) (Select one) favourable SAVE AND CLOSE unfavourable SUBMIT AND MARK Official Time: 11:53:30 equal