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Risk Ratios 1. Receivables turnover ratio 2. Average collection period 3. Inventory turnover ratio times days times

Risk Ratios 1. Receivables turnover ratio 2. Average collection period 3. Inventory turnover ratio times days times

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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5 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 $3,016,000 Cost of goods sold 1,946,000 Gross profit 1,070,000 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 VIRTUAL GAMING SYSTEMS $854,000 25,000 Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable 7,600 13,000 44,000 Balance Sheets December 31 Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: 943,600 $126,400 Risk Ratios 1. Receivables turnover ratio 2. Average collection period 3. Inventory turnover ratio Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 4. Average days in inventory 5. Current ratio 6. Acid-test ratio 7. Debt to equity ratio 8. Times interest earned ratio times days times days 2024 % times 2023 Required: Assuming that all sales were on account, calculate the following risk ratios for 2024. (Use 365 days a year. Round your final answers to 1 decimal place.) $182,000 $140,000 77,000 56,000 101,000 131,000 11,600 5,520 101,000 206,000 236,000 266,000 206,000 (63,000) (38,000) 881,600 $736,520 0 $62,000 $77,000 5,200 13,000 13,600 2,600 281,000 221,000 296,000 296,000 224,400 126,320 $881,600 $736,520
Transcribed Image Text:5 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 $3,016,000 Cost of goods sold 1,946,000 Gross profit 1,070,000 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 VIRTUAL GAMING SYSTEMS $854,000 25,000 Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable 7,600 13,000 44,000 Balance Sheets December 31 Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: 943,600 $126,400 Risk Ratios 1. Receivables turnover ratio 2. Average collection period 3. Inventory turnover ratio Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 4. Average days in inventory 5. Current ratio 6. Acid-test ratio 7. Debt to equity ratio 8. Times interest earned ratio times days times days 2024 % times 2023 Required: Assuming that all sales were on account, calculate the following risk ratios for 2024. (Use 365 days a year. Round your final answers to 1 decimal place.) $182,000 $140,000 77,000 56,000 101,000 131,000 11,600 5,520 101,000 206,000 236,000 266,000 206,000 (63,000) (38,000) 881,600 $736,520 0 $62,000 $77,000 5,200 13,000 13,600 2,600 281,000 221,000 296,000 296,000 224,400 126,320 $881,600 $736,520
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