Financial information for Hanshew Company is presented below.

Additional information:1. Inventory at the beginning of 2010 was $118,000.2. Receivables (net) at the beginning of 2010 were $88,000.The allowance for doubtful accounts was $4,000 at the end of 2011, $3,800 at the end of 2010, and $3,700 at the beginning of 20103. Total assets at the beginning of 2010 were $630,000.4. No common stock transactions occurred during 2010 or 2011.5. All sales were on account.Instructions(a) Indicate, by using ratios, the change in liquidity and profitability of Hanshew Company from 2010 to 2011.(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, 2011, and(2) as of December 31, 2012, after giving effect to the situation. Net income for 2012 was $50,000. Total assets on December 31, 2012, were$700,000.br>

HANSHEW COMPANY Balance Sheets December 31 Assets 2011 2010 $ 70,000 $ 65,000 Cash Short-term investments 52,000 40,000 Receivables (net) Inventories 98,000 80,000 135,000 125,000 Prepaid expenses 23,000 29,000 130,000 180,000 Land 130,000 Building and equipment (net) 175,000 $684,000 $648,000 Liabilities and Stockholders' Equity Notes payable Accounts payable Accrued liabilities $100,000 48,000 $100,000 42,000 50,000 40,000 150,000 200,000 116,000 Bonds payable, due 2012 Common stock, $10 par Retained earnings 150,000 200,000 136,000 $684,000 $648,000 HANSHEW COMPANY Income Statement For the Years Ended December 31 2011 2010 $850,000 Sales $790,000 575,000 Cost of goods sold 620,000 Gross profit Operating expenses 230,000 215,000 187,000 173,000 $ 42,000 $ 43,000 Net income