Required information Problem 12-6A (Static) Use ratios to analyze risk and profitability (LO12-3, 12-4) [The following information applies to the questions displayed below] Income statement and balance sheet 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 2025 Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Problem 12-6A (Static) Part 1 $ 3,560,000 2,490,000 1,070,000 Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Connon stock Retained earnings Total liabilities and stockholders' equity Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio 965,000 40,000 0 23,000 9,000 1,037,000 $ 33,000 VIRTUAL GAMING SYSTEMS 2024 $ 3,086,000 1,960,000 1,126,000 Balance Sheets December 31 Answer is complete but not entirely correct. 2024 38.3✔ times 15.8 times 4.00 73.0 % 868,000 32,000 9,000 20,000 58,000 987,080 $ 139,000 2025 39.3✔ times 19.5 times 2.5 14.6% 2825 $ 216,000 90,000 140,000 15,000 115,000 310,000 310,000 (124,000) $ 1,072,000 $ 161,000 12,000 13,000 450,000 310,000 126,000 $ 1,072,000 2024 $ 196,000 91,000 115,000 13,000 115,000 220,000 280,000 (84,000) $ 946,000 $ 76,000 8,000 20,000 295,000 310,000 237,000 $ 946,000 2923 $ 154,000 70,000 145,000 7,200 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.) 250,000 220,000 (52,000) $ 794,200 $ 91,000 4,000 15,000 235,000 310,000 139,200 $ 794,200

Q: Classify the Costs for Financial Statements?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: What are the measure of outputs in accounting?

A: The objective of this question is to understand the various measures of outputs in the field of…

Q: Required information Skip to question [The following information applies to the questions displayed…

A: Segment reporting breaks down the operations of a company into manageable pieces, or segments.…

Q: Distinguish between Income and Expenditure Account and Receiptand Payment Account.

A: Difference between income and expenditure account and receipt and payment account:

Reporting Cash Flows

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.

Balance Sheet

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.

Financial Statements

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.

Owner's Capital

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.