VIRTUAL GAMING SYSTEMS Income Statements For the years ended December 31 2022 2021 Net sales $3,560,eee $3,686,eee Cost of goods sold 2,490, eee 1,960, eee Gross profit 1,27e, eee 1,126,eee Expenses: Operating expenses 965,800 868,000 Depreciation expense 40, see 32,eee Loss on sale of land 9, eee Interest expense 23,800 2e, see Income tax expense 9, eee 58,000 Total expenses 1,037,00 987, e80 Net income $ 33,800 $ 139,888 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2022 2021 2020 $ 216,000 90,000 140,00 15,800 $196,880 91,80 115,000 13,000 $154,800 70,000 145, eee 7,280 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 115,000 115,00 319,00 220,wee 310, eee 280,000 (124,289) (84,980) $1,672,880 $946,880 25e,eee 220,000 (52,880) $794,280 $ 161, e80 12,880 13,000 $ 76,000 8,000 20,000 $ 91,880 4,880 15,888 450,000 295,000 235,000 318,888 126,eee $1,672,880 310, eee 237,800 $946, eee 310, eee 139,280 $794, 200 Problem 12-6A Part 1 Required: 1. Calculate the following risk ratios for 2021 and 2022: (Round your answers to 1 decimal place.) Answer is complete but not entirely correct. 2021 2022 Receivables turnover ratio 38.3 times 39.3 times Inventory turnover ratio 15.1 times 19.5 times Current ratio 4.0 to 1 2.5 to 1 Debt to equity ratio 80.1 % 129.4 % [The following information applies to the questions displayed below.) Income statement and balance sheet data for Virtual Gaming Systems are provided below. VIRTUAL GAMING SYSTEMS Income Statements For the years ended December 31 2022 2021 Net sales $3,560,000 $3,886,880 Cost of goods sold 2,490,000 1,960, eee Gross profit 1,678,888 1,126,880 Expenses: Operating expenses 965, eee 868, eee Depreciation expense 40,000 32,eee Loss on sale of land 9,880 Interest expense 23,000 2e,eee Income tax expense 9,000 58,000 Total expenses 1,037,880 987, e8e Net income $ 33,000 $ 139,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2022 2021 2020 $ 216,880 90, eee 140, eee 15,800 $196,880 91,800 115,000 13,000 $154,000 70,000 145, eee 7,280 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 115,000 310,000 310,000 (124,880) $1,272,880 115,00 220,000 250, eee 280,000 22e, eee (84,980) (52,880) $946,989 $794,280 $ 161,eee 12,000 13,000 $ 76,000 8,000 20,880 $ 91,eee 4, eee 15,888 450, eee 295,880 235, eee 310, eee 126, see $1,272,880 310, eee 237,80 $946,880 310,000 139, 280 $794,200 Problem 12-6A Part 2 2. Calculate the following profitability ratios for 2021 and 2022: (Round your answers to 1 decimal place.) 2021 96 96 2022 96 Gross profit ratio Return on assets Profit margin Asset turnover 96 96 times times
