294 Chapter 5 The Mantle Inn commenced operation the Inn's financial condition. Bala Problem 21 un commenced operations on lanuary 1, 20X1. and has been operating for two years. Assume that you are the new assistant manager and denne desire to gain some insight into s nhancial condition, Balance sheets and condensed income statements for the first two years are as follows: Balance Sheets Mantle Inn December 31, 20X1 and 20x2 Assets 20X1 20X2 Current Assets: $ Cash 10,000 $ 15,000 Marketable Securities 50,000 55,000 Accounts Receivable 60,000 Inventories 10,000 12.000 Total Current Assets 75,000 137,000 Property and Equipment: Land 100,000 100,000 Building (net) 1,950,000 1,900,000 Furniture & Equipment (net) 240,000 200,000 Total Property & Equipment 2,290,000 2,200,000 Total Assets $2,365,000 $2,337,000 $ 55,000 1,300,000 1,355,000 $ 60,000 1,250,000 1,310,000 Liabilities and Owners' Equity Current Liabilities Long-Term Debt Total Liabilities Owners' Equity Common Stock Retained Earnings Total Owners' Equity Total Liabilities and Owners' Equity 1,000,000 10,000 1,010,000 $2,365,000 1,000,000 27,000 1,027,000 $2,337,000 Condensed Income Statements Mantle Inn For the years ended December 31, 20X1 and 20X2 20X1OSTO 20X2 Sales $1,200,000 $1,400,000 Operated Department Expense 620,000 700,000 Operated Department Income 580,000 Undistributed Operating Expenses 700,000 380,000 400,000 Gross Operating Profit 200,000 Non-Operating Expenses 300,000 185,000 Income Taxes 200,000 Net Income 5,000 45,000 $ 10,000 $ 55,000 Ratio Analysis 295 Required: 1. Calculate the follo Calculate the following ratios for both years. a. Current ratio b. Solvency ratio c. Profit margin d. Operating efficiency Calculate for 20X2 the following ratios: a Property and equipment turnover ratio b. Total assets turnover ratio C. Accounts receivable turnover ratio d Number of days accounts receivable outstanding e. Return on total assets f. Return on owners' equity