VIRTUAL GAMING SYSTEMS Income Statements For the years ended December 31 2022 2021 $3,560,000 2,490,000 1,070,000 $3,086,000 1,960,000 1,126,000 Net sales Cost of goods sold Gross profit Expenses: Operating expenses Depreciation expense Loss on sale of land 965,000 40,000 868,000 32,000 9,000 Interest expense Income tax expense Total expenses Net income 23,000 9,000 20,000 58,000 987,000 $ 139,000 1,037,000 $ 33,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2022 2021 2020 Assets Current assets: $ 216,000 $196,000 $154,000 91,000 115,000 13,000 Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds 90,000 140,000 15,000 70,000 145,000 7,200 115,000 220,000 280,000 (84,000) $1,072,000 $946,000 $794,200 115,000 310,000 310,000 250,000 220,000 (52,000) Land Equipment Less: Accumulated depreciation Total assets |(124,000) Liabilities and Stockholders' Equity Current liabilities: $ 161,000 $ 76,000 $ 91,000 8,000 20,000 Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 12,000 13,000 4,000 15,000 450,000 295,000 235,000 310,000 126,000 $1,072,000 $946,000 $794,200 310,000 237,000 310,000 139,200
VIRTUAL GAMING SYSTEMS Income Statements For the years ended December 31 2022 2021 $3,560,000 2,490,000 1,070,000 $3,086,000 1,960,000 1,126,000 Net sales Cost of goods sold Gross profit Expenses: Operating expenses Depreciation expense Loss on sale of land 965,000 40,000 868,000 32,000 9,000 Interest expense Income tax expense Total expenses Net income 23,000 9,000 20,000 58,000 987,000 $ 139,000 1,037,000 $ 33,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2022 2021 2020 Assets Current assets: $ 216,000 $196,000 $154,000 91,000 115,000 13,000 Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds 90,000 140,000 15,000 70,000 145,000 7,200 115,000 220,000 280,000 (84,000) $1,072,000 $946,000 $794,200 115,000 310,000 310,000 250,000 220,000 (52,000) Land Equipment Less: Accumulated depreciation Total assets |(124,000) Liabilities and Stockholders' Equity Current liabilities: $ 161,000 $ 76,000 $ 91,000 8,000 20,000 Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 12,000 13,000 4,000 15,000 450,000 295,000 235,000 310,000 126,000 $1,072,000 $946,000 $794,200 310,000 237,000 310,000 139,200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Income statement and
Required:
1. Calculate the following risk ratios for 2021 and 2022:
a. Receivables turnover ratio. c.
2. Calculate the following profitability ratios for 2021 and 2022:
a. Gross profit ratio. c. Profit margin. b. Return on assets. d. Asset turnover.
3. Based on the ratios calculated, determine whether overall risk and profitability improved from 2021 to 2022.
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