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Problem 12-4A (Static) Calculate risk ratios (LO12-3) The following income statement and balance sheets for Virtual Gaming Systems are provided. Net sales Cost of goods sold Gross profit Expenses: VIRTUAL GAMING SYSTEMS Income Statement For the Year Ended December 31, 2024 Net income Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses $ 868,000 32,000 9,000 20,000 58,000 $ 3,086,000 1,960,000 1,126,000 987,000 $ 139,000

Problem 12-4A (Static) Calculate risk ratios (LO12-3) The following income statement and balance sheets for Virtual Gaming Systems are provided. Net sales Cost of goods sold Gross profit Expenses: VIRTUAL GAMING SYSTEMS Income Statement For the Year Ended December 31, 2024 Net income Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses $ 868,000 32,000 9,000 20,000 58,000 $ 3,086,000 1,960,000 1,126,000 987,000 $ 139,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assuming that all sales were on account, calculate the following risk ratios for 2024.

 

Risk Ratios
1. Receivables turnover ratio    38.3    times
2. Average collection period    9.5    days
3. Inventory turnover ratio    15.1    times
4. Average days in inventory    24.2    days
5. Current ratio    4.0    
6. Acid-test ratio       ? 
7. Debt to equity ratio    ?    %
8. Times interest earned ratio    ?    times

**Problem 12-4A (Static) Calculate risk ratios (LO12-3)** The following income statement and balance sheets for Virtual Gaming Systems are provided. **VIRTUAL GAMING SYSTEMS** *Income Statement* *For the Year Ended December 31, 2024* - **Net sales:** $3,086,000 - **Cost of goods sold:** $1,960,000 **Gross profit:** $1,126,000 **Expenses:** - **Operating expenses:** $868,000 - **Depreciation expense:** $32,000 - **Loss on sale of land:** $9,000 - **Interest expense:** $20,000 - **Income tax expense:** $58,000 **Total expenses:** $987,000 **Net income:** $139,000 In this income statement for Virtual Gaming Systems, we see the financial performance over a year. Key figures include net sales of $3,086,000, a gross profit of $1,126,000, total expenses amounting to $987,000, and a resulting net income of $139,000. This document is crucial for calculating risk ratios and analyzing financial health.
Transcribed Image Text:**Problem 12-4A (Static) Calculate risk ratios (LO12-3)** The following income statement and balance sheets for Virtual Gaming Systems are provided. **VIRTUAL GAMING SYSTEMS** *Income Statement* *For the Year Ended December 31, 2024* - **Net sales:** $3,086,000 - **Cost of goods sold:** $1,960,000 **Gross profit:** $1,126,000 **Expenses:** - **Operating expenses:** $868,000 - **Depreciation expense:** $32,000 - **Loss on sale of land:** $9,000 - **Interest expense:** $20,000 - **Income tax expense:** $58,000 **Total expenses:** $987,000 **Net income:** $139,000 In this income statement for Virtual Gaming Systems, we see the financial performance over a year. Key figures include net sales of $3,086,000, a gross profit of $1,126,000, total expenses amounting to $987,000, and a resulting net income of $139,000. This document is crucial for calculating risk ratios and analyzing financial health.
**Virtual Gaming Systems** **Balance Sheets** *December 31* | | 2024 | 2023 | |--------------------|-------------|-------------| | **Assets** | | | | **Current assets:** | | | | Cash | $196,000 | $154,000 | | Accounts receivable| $91,000 | $70,000 | | Inventory | $115,000 | $145,000 | | Prepaid rent | $13,000 | $7,200 | | **Long-term assets:** | | | | Investment in bonds| $115,000 | $0 | | Land | $220,000 | $250,000 | | Equipment | $280,000 | $220,000 | | Less: Accumulated depreciation | ($84,000) | ($52,000) | | **Total assets** | $946,000 | $794,200 | | **Liabilities and Stockholders' Equity** | | | |--------------------|-------------|-------------| | **Current liabilities:** | | | | Accounts payable | $76,000 | $91,000 | | Interest payable | $8,000 | $4,000 | | Income tax payable | $20,000 | $15,000 | | **Long-term liabilities:** | | | | Notes payable | $295,000 | $235,000 | | **Stockholders' equity:** | | | | Common stock | $310,000 | $310,000 | | Retained earnings | $237,000 | $139,200 | | **Total liabilities and stockholders’ equity** | $946,000 | $794,200 |
Transcribed Image Text:**Virtual Gaming Systems** **Balance Sheets** *December 31* | | 2024 | 2023 | |--------------------|-------------|-------------| | **Assets** | | | | **Current assets:** | | | | Cash | $196,000 | $154,000 | | Accounts receivable| $91,000 | $70,000 | | Inventory | $115,000 | $145,000 | | Prepaid rent | $13,000 | $7,200 | | **Long-term assets:** | | | | Investment in bonds| $115,000 | $0 | | Land | $220,000 | $250,000 | | Equipment | $280,000 | $220,000 | | Less: Accumulated depreciation | ($84,000) | ($52,000) | | **Total assets** | $946,000 | $794,200 | | **Liabilities and Stockholders' Equity** | | | |--------------------|-------------|-------------| | **Current liabilities:** | | | | Accounts payable | $76,000 | $91,000 | | Interest payable | $8,000 | $4,000 | | Income tax payable | $20,000 | $15,000 | | **Long-term liabilities:** | | | | Notes payable | $295,000 | $235,000 | | **Stockholders' equity:** | | | | Common stock | $310,000 | $310,000 | | Retained earnings | $237,000 | $139,200 | | **Total liabilities and stockholders’ equity** | $946,000 | $794,200 |
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