Questions 1-4.

1. Compute the following: (show your work): - Working Capital - Current Ratio - Asset Turnover - Inventory Turnover - Days' Sales in Inventory - Accounts Receivable Turnover - Days' Sales in Receivables 2. Do you think Palisade Creek has adequate liquidity and solvency? Explain and use your computational proof from question \#1 to support your answer. 3. Is Palisades profitable? Explain and use numbers from the financial statements. 4. Would you invest in this company? Explain and use numbers from the financial statements and/or the ratios you computed in \#1. To submit this portion of the assignment, you will need to do your work in Word or by hand and submit your answers as a file. If doing this by hand, you will first need to take a picture of your work and save it as a single file before submitting. - In answering these questions, you must use proper writing mechanics (spelling, wording, grammar, etc.). . If submitting a handwritten response, your writing must be professional (neat). - For questions #2,3, and 4 , you will be graded based on the completeness and thoughtfulness of your response. You also must demonstrate that you understand the meaning of the terms liquidity, solvency, and profitability. You must use the computations you did in \#1 to help justify your answer and you must show that you understand the meaning of the terms and computations. Refer to the financial statements (Income Statement and Balance Sheet) for Palisade Creek Company in part \#8 of Comprehensive Problem \#2 (in Cengage). Respond to the following questions (if you have already submitted the Comprehensive Problem in Cengage, you can still access it in Cengage by 1. Prepare a multiple-step income statement. Palisade Creek Co. Income Statement For the Year Ended May 31, 20Y 6 Sales Cost of goods sold Gross profit \[ \begin{array}{r} \$ 5 \longdiv { 5 , 3 8 0 , 2 5 0 } \\ \frac{2,991,950}{\$ 2,388,300} \end{array} \] Expenses: Selling expenses: Sales salaries expense Advertising expense Depreciation expense Store supplies expense Miscellaneous selling expense Total selling expenses Administrative expenses: office salaries expense Rent expense: 55417,70088,70012,000 2. Prepare a statement of stockholders' equity. Assume that additional common stock of $10,000 was issued in January 20y6. 2. Prepare a statement of stockholders' equity. Assume that additional common stock of $10,000 was issued in January 20 J 6 . 3. Prepare a balance sheet. Palisade Creek Co. Balance Sheet May 31,20Y6 Total current assets \[ \$ 5 \longdiv { 9 6 3 , 4 2 0 } \] Property, plant, and equipment: Store equipment Accumulated depreciation-store equipment Total property, plant, and equipment Total assets Liabilities Current liabilities: Accounts payable Salaries payable Customers refunds payable Total liabilities Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 1. Prepare a multiple-step income statement. Palisade Creek Co. Income Statement For the Year Ended May 31, 20Y6 Sales Cost of goods sold Gross profit \( \$ \$ \longdiv { 5 , 3 8 0 , 2 5 0 } \) $2,388,3002,991,950 Expenses: Selling expenses: Sales salaries expense Advertising expense. Depreciation expense Store supplies expense Miscellaneous selling expense Total selling expenses Administrative expenses: office salaries expense. Rent expense