Question

The following financial information is for Frizell Company.


Additional information:
1. Inventory at the beginning of 2013 was $115,000.
2. Accounts receivable (net) at the beginning of 2013 were $86,000.
3. Total assets at the beginning of 2013 were $660,000.
4. No common stock transactions occurred during 2013 or 2014.
5. All sales were on account.
Instructions
(a) Indicate, by using ratios, the change in liquidity and profitability of Frizell Company from 2013 to 2014.
(b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2014, and (2) as of December 31, 2015, after giving effect to the situation. Net income for 2015 was $54,000. Total assets on December 31, 2015, were$900,000.


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  • CreatedApril 07, 2014
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