Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following income statement and balance sheets for Virtual Gaming Systems are provided. VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2018
The following income statement and balance sheets for Virtual Gaming Systems are provided. VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2018 $3,001,000 1,943,000 Net sales Cost of goods sold Gross profit Expenses: Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense 1,058,000 $851,000 23,500 7,300 11,500 41,000 Total expenses 934,300 $ 123,700 Net income VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2018 2017 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds $179,000 74,000 98,000 11,300 $137,000 53,000 128,000 5,160 98,000 203,000 263,000 (58,500) Land Equipment Less: Accumulated depreciation 233,000 203,000 (35,000) Total assets $867,800 $724,160 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable $ 74,000 2,300 $ 59,000 4,600 11,500 13,300 Long-term liabilities: Notes payable Stockholders' equity: 278,000 218,000 Common stock 293,000 221,700 293,000 123,560 Retained earnings Total liabilities and stockholders' equity $867,800 $724,160 Required: Assuming that all sales were on account, calculate the following risk ratios for 2018. (Use 365 days a year. Round your intermediate calculations and final answers to 1 decimal place.) Risk Ratios 1. Receivables turnover ratio times 2. Average collection period days Inventory turnover ratio 3. times 4. Average days in inventory days to 1 5. Current ratio 6. Acid-test ratio to 1 Debt to equity ratio 7. 8. Times interest earned ratio times
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started