Requirement 8. Evaluate the company's success for the first year of operations by calculating the following ratios. Round to two decimal places. Comment on the results.

a. Liquidity: (i) Current ratio; (ii) Acid-test ratio, and (iii) Cash ratio

For each liquidity ratio, select the appropriate formula and then calculate the ratio.

Requirement 8. Evaluate the company's success for the first year of operations by calculating the following ratios. Round to two decimal places. Comment on the results. a. Liquidity: () Current ratio; (i) Acid-test ratio, and (ii) Cash ratio For each liquidity ratio, select the appropriate formula and then calculate the ratio. (Round each ratio to two decimal places, X.XX. Abbreviations used: STI = short-term investments.) (Click the icon to view the income statement.) (Click the icon to view the balance sheet.) = Liquidity: (0) Current ratio (ii) Acid-test ratio (iii) Cash ratio Formula Current assets / Current liabilities (Cash + Cash equivalents + STI + Net current receivables) / Current liabilities (Cash + Cash equivalents) / Current liabilities Ratio 3.37 1.97 1.06 = = = = Choose from any list or enter any number in the input fields and then click Check Answer. i Reference $ 2,150,000 927,000 1,223,000 $ Enter Net Appliance-Rapids City Income Statement Year Ended December 31, 2018 Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses: Franchise Fee Expense Salaries Expense Utilities Expense Insurance Expense Supplies Expense Bad Debt Expense Bank Expense Credit Card Expense Depreciation Expense-Building Depreciation Expense-Store Fixtures Depreciation Expense-Office Equipment Amortization Expense-Franchise Cash Short and Over Total Operating Expenses Operating Income Other Income and (Expenses): Interest Revenue 86,000 170,000 10,000 1,400 540 27,000 1,775 600 16,000 3,000 20,000 4,700 341,029 881,971 15,893 (15,000) Interest Expense Total Other Income and (Expenses) 893 $ 882,864 Net Income (Loss) Assets $ Current Assets: Cash Petty Cash Accounts Receivable 631,891 200 $ 270,000 (27,000) 243,000 163,000 240 1,400 4,833 290,000 $ 1,334,564 Less: Allowance for Bad Debts Merchandise Inventory Office Supplies Prepaid Insurance Interest Receivable Notes Receivable Total Current Assets Property, Plant, and Equipment: Land Building Less: Accumulated DepreciationBuilding Store Fixtures Less: Accumulated DepreciationStore Fixtures Office Equipment Less: Accumulated DepreciationOffice Equipment Total Property, Plant, and Equipment Intangible Assets 70,000 500,000 (16,000) 484,000 45,000 (3,000) 42,000 50,000 (20,000) 30,000 626,000 Franchise 42,300 $ 2,002,864 Total Assets Liabilities Current Liabilities: Accounts Payable $ 330,000 15,000 Interest Payable Total Current Liabilities Long-term Liabilities: 345,000 250,000 Notes Payable Total Liabilities 595,000 Stockholders' Equity 550,000 857,864 Common Stock Retained Earnings Total Stockholders' Equity $ 1,407,864