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The firm's comparative income statement and balance sheet for the years 2022 and 2021 follow. THE STAIR COMPANY Comparative Income Statement For Years Ended December
The firm's comparative income statement and balance sheet for the years 2022 and 2021 follow.
THE STAIR COMPANY Comparative Income Statement For Years Ended December 31, 2022 and 2021 | |||||||
Amounts | |||||||
2022 | 2021 | ||||||
Revenue | |||||||
Sales | $ | 984,000 | $ | 765,000 | |||
Less Sales Returns and Allowances | 24,000 | 15,000 | |||||
Net Sales | $ | 960,000 | $ | 750,000 | |||
Cost of Goods Sold | |||||||
Merchandise Inventory, January 1 | 91,200 | 84,000 | |||||
Net Purchases | $ | 323,520 | $ | 258,750 | |||
Total Merchandise Available for Sale | $ | 414,720 | $ | 342,750 | |||
Less Merchandise Inventory, December 31 | 94,080 | 91,200 | |||||
Cost of Goods Sold | $ | 320,640 | $ | 251,550 | |||
Gross Profit on Sales | $ | 639,360 | $ | 498,450 | |||
Operating Expenses | |||||||
Selling Expenses | |||||||
Sales Salaries Expenses | $ | 78,720 | $ | 76,500 | |||
Payroll Tax ExpenseSelling | 9,600 | 9,000 | |||||
Other Selling Expenses | 28,800 | 19,500 | |||||
Total Selling Expenses | $ | 117,120 | $ | 105,000 | |||
General and Administrative Expenses | |||||||
Officers' Salaries Expense | $ | 139,200 | $ | 106,500 | |||
Payroll Tax ExpenseAdministrative | 14,400 | 9,000 | |||||
Depreciation Expense | 7,200 | 7,200 | |||||
Other General and Administrative Expenses | 14,400 | 9,000 | |||||
Total General and Administrative Expenses | $ | 175,200 | $ | 131,700 | |||
Total Operating Expenses | $ | 292,320 | $ | 236,700 | |||
Net Income before Income Taxes | $ | 347,040 | $ | 261,750 | |||
Income Tax Expense | 104,112 | 78,525 | |||||
Net Income after Income Taxes | $ | 242,928 | $ | 183,225 | |||
THE STAIR COMPANY Comparative Balance Sheet December 31, 2022 and 2021 | |||||||
Amounts | |||||||
2022 | 2021 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash | $ | 116,600 | $ | 52,000 | |||
Accounts Receivable | 102,700 | 94,000 | |||||
Merchandise Inventory | 94,080 | 91,200 | |||||
Prepaid Expenses | 10,200 | 6,000 | |||||
Supplies | 1,500 | 600 | |||||
Total Current Assets | $ | 325,080 | $ | 243,800 | |||
Property, Plant, and Equipment | |||||||
Land | $ | 82,000 | $ | 82,000 | |||
Building and Store Equipment | 89,800 | 89,800 | |||||
Less Accumulated DepreciationBldg & Store Equipment | (28,800 | ) | (21,600 | ) | |||
Net Book ValueBuilding and Store Equipment | $ | 61,000 | $ | 68,200 | |||
Total Property, Plant, and Equipment | $ | 143,000 | $ | 150,200 | |||
Total Assets | $ | 468,080 | $ | 394,000 | |||
Liabilities and Stockholders' Equity | |||||||
Current Liabilities | |||||||
Accounts Payable | $ | 34,700 | $ | 64,000 | |||
Sales Tax Payable | 1,700 | 5,000 | |||||
Payroll Taxes Payable | 1,800 | 1,500 | |||||
Interest Payable | 1,700 | 9,000 | |||||
Total Current Liabilities | $ | 39,900 | $ | 79,500 | |||
Long-Term Liabilities | |||||||
Mortgage Payable | 46,700 | 52,000 | |||||
Total Long-Term Liabilities | $ | 46,700 | $ | 52,000 | |||
Total Liabilities | $ | 86,600 | $ | 131,500 | |||
Stockholders' Equity | |||||||
Common Stock ($1 par, 10,000 shares authorized; 10,000 shares issued and outstanding) | $ | 10,000 | $ | 10,000 | |||
Paid-in CapitalCommon Stock | 10,000 | 10,000 | |||||
Retained Earnings | 361,480 | 242,500 | |||||
Total Stockholders' Equity | $ | 381,480 | $ | 262,500 | |||
Total Liabilities and Stockholders' Equity | $ | 468,080 | $ | 394,000 | |||
Assume all sales are credit sales.
Calculate the current ratio for 2021 and 2022. Current ratio Choose Denominator Choose Numerator Current ratio 2022 1 :1 . 2021 = :1 Calculate the acid-test ratio for 2021 and 2022. Acid-test ratio Choose Denominator Choose Numerator Acid-test ratio 2022 :1 = = 2021 . :1 Calculate the inventory turnover for 2021 and 2022. Inventory turnover Choose Denominator Choose Numerator Inventory turnover 2022 2021 Calculate the return on sales for 2021 and 2022. Return on sales Denominator Numerator Return on sales 11 % 2022 2021 . 11 % Calculate the earnings per share of common stock for 2021 and 2022. Earnings per share of common stock Choose Denominator Choose Numerator Earnings per share of common stock 2022 per share 2021 . per share
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