1. The financial statements of Neale Corporation include the following information:

Current Year Prior Year

Balance sheet:

Cash $ 24,000 $ 25,300

Short-term investments 36,000 29,900

Accounts receivable, net 76,800 83,950

Inventory 90,000 81,650

Prepaid expenses 19,200 9,200

Total current assets 246,000 230,000

Total current liabilities 150,000 104,650

Income statement:

Net credit sales $ 654,000

Cost of goods sold 476,400

Required:

Calculate the following ratios for the current year:

a. current ratio

b. acid-test ratio

c. inventory turnover

d. accounts receivable turnover

e. days sales in average receivables to the nearest day

2. The income statement of Vatis Corporation and selected additional data are presented below:

Tavis Corporation

Income Statement

For the Year Ended December 31, 2019

Net sales $214,000

Cost of goods sold __103,000

Gross profit 111,000

Selling and general expenses _88,000

Income from operations 23,000

Interest expense __5,500

Income before income tax 17,500

Income tax expense __7,000

Net income $ 10,500

Additional data:

Total assets $224,000

Common stockholders equity $106,000

Preferred dividends $ 7,000

Required:

Calculate the following ratios for the current year:

1. return on sales
2. return on assets
3. return on equity