(S) Payout. (6) Debt to total assets. 50 [ 14 Financial Statement Analysis (b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2013 to 2014 of Clarence Corporation. ratios, and comment P14-4 Financial information for Ernie Bishop Company is presented below. liquidity and Lity. Ernie Bishop Company Statements of Financial Position December 31 Assets 2013 2012 Land 130,000 130,000 Building and equipment (net) 168,000 175,000 Prepaid expenses 29,000 23,000 Inventory 125,000 135,000 Receivables (net) 98,000 80,000 Short-term investments 52,000 40,000 Cash 70,000 65,000 672,000 648,000 Equity and Liabilities Share capital-ordinary, 10 par 200,000 200,000 Retained earnings 130,000 116,000 Bonds payable, due 2016 150,000 150,000 Notes payable 100,000 100,000 Accounts payable 48,000 42,000 Accrued liabilities 44,000 40,000 672,000 648,000 Ernie Bishop Company Income Statement For the Years Ended December 31 2013 2012 Net sales 858,000 798,000 Cost of goods sold 611,000 575,000 Gross profit Operating expenses 247,000 204,500 223,000 181,000 42,500 42,000 Net income Additional information: 1. Inventory at the beginning of 2012 was 118,000. 2. Total assets at the beginning of 2012 were 632,000. 3. No ordinary share transactions occurred during 2012 or 2013. 4. All sales were on account. 5. Receivables (net) at the beginning of 2012 were 88,000. 6. Notes payable are classified as a current liability. Instructions (a) Indicate, by using ratios, the change in liquidity and profitability of Emie Bishop Company from 2012 to 2013. (Note: Not all profitability ratios can be computed.) (b) Given on the next page are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2013, and (2) as of December 31, 2014, after giving effect to the situation. Net income for 2014 was 50,000. Total assets on December 31, 2014, were 700,000. Situation ) 18,000 ordinary shares were sold A Ratio Return on ordinary shareholders' Problems 727 Edit Anotasi Isi & Tanda Tangan Konversi Semua S