The following income statement and balance sheets for Virtual Gaming Systems are provided. Required: Assuming that all
Question:
The following income statement and balance sheets for Virtual Gaming Systems are provided.
Required:
Assuming that all sales were on account, calculate the following risk ratios for 2021.
1. Receivables turnover ratio.
2. Average collection period.
3. Inventory turnover ratio.
4. Average days in inventory.
5. Current ratio.
6. Acid-test ratio.
7. Debt to equity ratio.
8. Times interest earned ratio.
VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2021 Net sales $ 3,086,000 Cost of goods sold 1,960,000 Gross profit 1,126,000 Expenses: $868,000 Operating expenses Depreciation expense 32,000 Loss on sale of land 9,000 Interest expense 20,000 Income tax expense 58,000 Total expenses 987,000 Net income $ 139,000
Step by Step Answer:
A B 1 2 C D E RECEIVABLE TURNOVER RATIO F VIRTUAL GAMING SYSTEMS AVERAGE ACCOUNTS RECEIVABLE AVERAGE ...View the full answer
Financial Accounting
ISBN: 978-1259914898
5th edition
Authors: David Spiceland, Wayne M. Thomas, Don Herrmann
Related Video
Days sales outstanding (DSO) is a measure of the average number of days that it takes a company to collect payment for a sale. DSO is often determined on a monthly, quarterly, or annual basis. To compute DSO, divide the average accounts receivable during a given period by the total value of credit sales during the same period and multiply the result by the number of days in the period being measured.
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