Problem 12-6A (Algo) Use ratios to analyze risk and profitability (LO12-3, 12-4) [The following information applies to the questions displayed below.] Income statements and balance sheets data for Virtual Gaming Systems are provided below. VIRTUAL GAMING SYSTEMS Income Statements For the Years Ended December 31 2825 Net sales Cost of goods sold Gross profit Expenses: Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Net income 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 Problem 12-6A (Algo) Part 1 Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio 2024 $3,555,000 2,489,000 1,066,000 times times % 964,000 39,000 22,500 8,900 1,034,400 31,600 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2024 $3,081,000 1,959,000 1,122,000 2025 times times 867,000 31,500 8,900 19,500 52,500 979,480 142,600 2825 $214,500 88,500 138,500 14,900 114,000 309,000 309,000 (121,500) $1,066,900 $118,200 11,700 12,980 490,000 309,000 125,100 $1,066,990 2024 $195,000 90,000 114,000 12,980 114,000 219,000 279,000 (82,500) $941,400 Required: 1. Assuming that all sales were on account, calculate the following risk ratios for 2024 and 2025: (Round your answers to 1 decimal place.) $75,000 7,880 19,500 294,000 309,000 236,100 $941,400 2023 $153,000 69,000 144,000 7,088 249,000 219,000 (51,000) $790,880 $134,780 3,900 14,900 234,000 309,000 93,500 $790,080
Problem 12-6A (Algo) Use ratios to analyze risk and profitability (LO12-3, 12-4) [The following information applies to the questions displayed below.] Income statements and balance sheets data for Virtual Gaming Systems are provided below. VIRTUAL GAMING SYSTEMS Income Statements For the Years Ended December 31 2825 Net sales Cost of goods sold Gross profit Expenses: Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Net income 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 Problem 12-6A (Algo) Part 1 Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio 2024 $3,555,000 2,489,000 1,066,000 times times % 964,000 39,000 22,500 8,900 1,034,400 31,600 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2024 $3,081,000 1,959,000 1,122,000 2025 times times 867,000 31,500 8,900 19,500 52,500 979,480 142,600 2825 $214,500 88,500 138,500 14,900 114,000 309,000 309,000 (121,500) $1,066,900 $118,200 11,700 12,980 490,000 309,000 125,100 $1,066,990 2024 $195,000 90,000 114,000 12,980 114,000 219,000 279,000 (82,500) $941,400 Required: 1. Assuming that all sales were on account, calculate the following risk ratios for 2024 and 2025: (Round your answers to 1 decimal place.) $75,000 7,880 19,500 294,000 309,000 236,100 $941,400 2023 $153,000 69,000 144,000 7,088 249,000 219,000 (51,000) $790,880 $134,780 3,900 14,900 234,000 309,000 93,500 $790,080
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Can you please see attached and help me solve for part one and part two using the income statements and
Transcribed Image Text:Problem 12-6A (Algo) Part 2
2. Calculate the following profitability ratios for 2024 and 2025: (Round your answers to 1 decimal place.)
Gross profit ratio
Return on assets
Profit margin
Asset turnover
2024
times
2025
%
times
![Problem 12-6A (Algo) Use ratlos to analyze risk and profitability (LO12-3, 12-4)
[The following information applies to the questions displayed below.]
Income statements and balance sheets data for Virtual Gaming Systems are provided below.
Net sales
Cost of goods sold
Gross profit
Expenses:
Operating expenses
Depreciation expense
Loss on sale of land
Interest expense
Income tax expense
Total expenses
Net income
Assets
Current assets:
Cash
VIRTUAL GAMING SYSTEMS
Income Statements
For the Years Ended December 31
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
Receivables turnover ratio
Inventory turnover ratio
Current ratio
Debt to equity ratio
Income tax payable
Long-term liabilities:
Notes payable
Stockholders' equity:
Connon stock
Retained earnings
Total liabilities and stockholders' equity
2024
2825
$3,555,000
2,489,000
1,066,000
times
times
%
964,000
39,000
22,500
8,900
1,034,400
31,600
VIRTUAL GAMING SYSTEMS
Balance Sheets
December 31
2024
$3,081,000
1,959,000
1,122,000
2025
times
times
867,000
31,500
8,980
19,500
52,500
979,480
142,600
2025
$214,500
88,500
138,500
14,980
114,000
309,000
309,000
(121,500)
$1,066,900
$118, 200
11,700
12,900
490,000
309,000
125,100
$1,066,900
2024
$195,000
90,000
114,000
12,900
114,000
219,000
279,000
(82,500)
$941,400
$75,000
7,800
19,500
294,000
309,000
236,100
$941,400
Problem 12-6A (Algo) Part 1
Required:
1. Assuming that all sales were on account, calculate the following risk ratios for 2024 and 2025: (Round your answers to 1 decimal
place.)
2023
$153,000
69,000
144,000
7,888
@
249,000
219,000
(51,000)
$790,088
$134,780
3,900
14,988
234,000
309,000
93,500
$790,080](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2446d970-7eef-49bf-922a-9fcbe13cfbab%2Fd2c4cb99-f9b6-4d6f-8401-bfffab0b0172%2Fdvugmup_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 12-6A (Algo) Use ratlos to analyze risk and profitability (LO12-3, 12-4)
[The following information applies to the questions displayed below.]
Income statements and balance sheets data for Virtual Gaming Systems are provided below.
Net sales
Cost of goods sold
Gross profit
Expenses:
Operating expenses
Depreciation expense
Loss on sale of land
Interest expense
Income tax expense
Total expenses
Net income
Assets
Current assets:
Cash
VIRTUAL GAMING SYSTEMS
Income Statements
For the Years Ended December 31
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
Receivables turnover ratio
Inventory turnover ratio
Current ratio
Debt to equity ratio
Income tax payable
Long-term liabilities:
Notes payable
Stockholders' equity:
Connon stock
Retained earnings
Total liabilities and stockholders' equity
2024
2825
$3,555,000
2,489,000
1,066,000
times
times
%
964,000
39,000
22,500
8,900
1,034,400
31,600
VIRTUAL GAMING SYSTEMS
Balance Sheets
December 31
2024
$3,081,000
1,959,000
1,122,000
2025
times
times
867,000
31,500
8,980
19,500
52,500
979,480
142,600
2025
$214,500
88,500
138,500
14,980
114,000
309,000
309,000
(121,500)
$1,066,900
$118, 200
11,700
12,900
490,000
309,000
125,100
$1,066,900
2024
$195,000
90,000
114,000
12,900
114,000
219,000
279,000
(82,500)
$941,400
$75,000
7,800
19,500
294,000
309,000
236,100
$941,400
Problem 12-6A (Algo) Part 1
Required:
1. Assuming that all sales were on account, calculate the following risk ratios for 2024 and 2025: (Round your answers to 1 decimal
place.)
2023
$153,000
69,000
144,000
7,888
@
249,000
219,000
(51,000)
$790,088
$134,780
3,900
14,988
234,000
309,000
93,500
$790,080
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VIEWStep 5: Calculation showing the profit margin and asset turnover:
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