The following information is related to Leland AG.

Instructions

a. Compute the following ratios or relationships of Leland. Assume that the ending account balances are representative of the entire year unless the information provided indicates differently.

1. Current ratio.

2. Inventory turnover.

3. Accounts receivable turnover.

4. Earnings per share.

5. Profit margin on sales.

6. Return on assets for 2022.

b. Indicate for each of the following transactions whether the transaction would improve, weaken, or have no effect on the current ratio of Leland at December 31, 2022.

1. Write off an uncollectible account receivable, €2,200.

2. Repurchase ordinary shares for cash.

3. Pay €40,000 on notes payable (short-term).

4. Collect €23,000 on accounts receivable.

5. Buy equipment on account.

6. Give an existing creditor a short-term note in settlement of account.

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Leland AG Statement of Financial Position December 31, 2022 Equipment (net) €150,000 Share capital-ordinary (par €5) €260,0o0 Land 20,000 Retained earnings 141,000 Prepaid insurance Notes payable (short-term) Accounts payable 8,000 50,000 Inventory 170,000 32,000 Receivables €110,000 Accrued liabilities 5,000 Less: Allowance 15,000 95,000 €488,000 Cash 45,000 €488,000