The following accounts (in no particular order) are for Perfect Reb Corporation for the fiscal year ended December

31, 2015. (S/T = Short-Term; L/T = Long-Term)

REQUIRED:

A) Calculate Perfect Reb Corporations net income or net loss for the 2015 fiscal year. You may solve this in any

manner that you wish, but it is highly recommended to prepare a multiple step income statement.

B) Using proper form, prepare Perfect Reb Corporations balance sheet for 2015.

C) Using the information provided, solve for the requested ratios and respond to the corresponding questions.

Common Stock (13,000 shares

outstanding)

$52,000 Sales Discounts $5,000

Accrued Expenses (Payables)

20,000 Income Tax Expense (25% of IBIT) ???

Miscellaneous Operating Expenses

50,000 Cash 142,000

Accounts Receivable

20,000 Interest Expense 4,000

Buildings

186,000 Marketable Securities 62,000

Retained Earnings

??? Notes Payable (due in 5 years) 12,000

Wages Expense

60,000 Rent Expense 11,000

Inventory

40,000 Unearned Revenue 19,000

Accumulated Depreciation Buildings

48,000 Allowance for Uncollectible

Accounts

15,000

Accounts Payable

41,000 Sales 433,000

Gain on Sale of Equipment

62,000 Mortgage Payable ($12,000 S/T) 144,000

Land

50,000 Sales Returns & Allowances 12,000

Bad Debt Expense

2,000 Depreciation Expense 11,000

L/T Investments

7,000 Cost of Goods Sold 109,000

Notes Receivable ($2,000 S/T)

13,000 Interest Revenue 3,000

A) NET INCOME (10 points) SHOW ALL WORK AND CALCULATIONS!!!!

B) CLASSIFIED BALANCE SHEET (15 points)

Perfect Reb Corporation

Balance Sheet

December 31, 2015

ASSETS LIABILITIES

Current Assets Current Liabilities

Total Current Liabilities

Total Current Assets

Long-Term Assets Long-Term Liabilities

Total Long-Term Assets Total Long Term Liabilities

Fixed Assets

Total Liabilities

EQUITY

Total Fixed Assets

Total Equity

TOTAL ASSETS

TOTAL LIABILITIES & EQUITY

C) RATIOS AND ANALYSIS (15 points):

Use the financial statements and additional information to calculate the ratios. Round your answers to two decimal

places. Be sure to label your answer correctly (example, %, times, days, etc.). IF AN ANSWER SHOULD BE

EXPRESSED AS A PERCENTAGE, DO NOT LEAVE IT IN DECIMAL FORM!!!! (i.e. 0.5015 = 50.15%!!!!)

Previous (December 31, 2014) year end balances for:

Accounts receivable, net of allowance $2,000

Inventory 15,000

Stockholders Equity 139,000

Market price per share for one share of common stock at Dec 31, 2015 $94.50/share

Dividend per share for one share of common stock for FYE Dec 31, 2015 $1.25/share

No new shares of common stock were issued during 2015. The companys credit policy is net 15.

RATIO CALCULATION ANSWER

1) Quick (Acid-Test) Ratio (2 points)

2) Dividend Yield (2 points)

3) Gross Profit Percentage (2 points)

4) Average Days Sales Uncollected 2 points)

5) Inventory Turnover (2 points)

6) Price-Earnings Ratio (2 points)

7) Using the liquidity ratios (and general accepted norms for the current ratio and quick/acid-test ratio), comment

on the companys financial position. (3 points)