The following financial information is for Ivanhoe Company. IVANHOE COMPANY Balance Sheets December 31 2022 Assets 2021 Cash $ 71,000 52,000 110,000 233,000 $ 66,000 40,000 91,000 165,000 27,000 130,000 25,000 130,000 184,000 259,000 $880,000 $703,000 Debt investments (short-term) Accounts receivable Inventory Prepaid expenses Land Building and equipment (net) Total assets Liabilities and Stockholders' Equity Notes payable Accounts payable Accru iabil Bonds payable, due 2025 Common stock, $10 par Retained earnings Total liabilities and stockholders' equity $171,000 68,000 39,000 249,000 207,000 146,000 $110,000 53,000 39,000 169,000 207,000 125,000 $880,000 $703,000 IVANHOE COMPANY Income Statements For the Years Ended December 31 2022 2021 $895,000 640,000 Sales revenue Cost of goods sold Gross profit Operating expenses Net income $793,000 574,000 219,000 255,000 190,000 161,000 $ 65,000 $ 58,000 Additional information: 1. 2. 3. Inventory at the beginning of 2021 was $115,000. Accounts receivable (net) at the beginning of 2021 were $88,000. Total assets at the beginning of 2021 were $630,000. No common stock transactions occurred during 2021 or 2022. All sales were on account. 4. 5. (b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2022, and (2) as of December 31, 2023, after giving effect to the situation. (Round Debt to assets ratio to 0 decimal places, e.g. 15 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to 0 decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g.-1% or (1%).) 1. Situation 20,000 shares of common stock were sold at par on July 1, 2023. Net income for 2023 was $52,000. All of the notes payable were paid in 2023. All other liabilities remained at their December 31, 2022 levels. Total assets on December 31, 2023, were $881,000. The market price of common stock was $9 and $13 on December 31, 2022 and 2023, respectively. Ratio Return on common stockholders' equity Debt to assets ratio 2. 3. Price-earnings ratio 2022 2023 % Change 31 % 26 % (16) Return on common stockholders' equity Debt to assets ratio Price earnings ratio 60 % 40 % (33) 2.87 times 5.18 times 80