The following income statement and balance sheet for Virtual Gaming Systems are provided. Required: Assuming that all
Question:
The following income statement and balance sheet for Virtual Gaming Systems are provided.
Required:
Assuming that all sales were on account, calculate the following risk ratios for 2012.
Receivables turnover ratio.
Average collection period.
Inventory turnover ratio.
Average days in inventory.
Current ratio.
Acid-test ratio.
Debt to equity ratio.
Times interest earned ratio.
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,...
Transcribed Image Text:
VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2012 Sales revenue Cost of goods sold $3,036,000 1,950,000 1,086,000 Gross profit Expenses: Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense $858,000 27,000 8,000 15,000 48,000 Total expenses 956,000 130,000 Net income VIRTUAL GAMING SYSTEMS Balance Sheet December 31 Accounts receivable Investment in bonds 2 (42,000) Liabilities and Stockholders'E Retained earnings Total liabilities and stockholders' equity
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VIRTUAL GAMING SYSTEMS Risk Ratios Receivable turnover ratio 3036000 70500 431 times Correc...View the full answer
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Related Book For
Financial Accounting
ISBN: 9780078110825
2nd Edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
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