B fx IC Exercise 1 B C D E F LL up to 30 points Since financial and accounting ratios are the product of the relationship of various financial statement line items, it should be possible to recreate financial statements based on ratio results and knowledge of the amounts of a few financial statement line items. + The following is a list of ratios that reflect the company's results consistently achieved over recent years. Profit margin on sales i Return on assets Gross profit margin Inventory turnover ration Receivables turnover ratio Acid-test ratio Current ratio Return on equity Debt to equity ratio Times interest earned ratio 6.00% 7.71% 30.00% 10.161 7.531 1.880 2.50 10.00% 0.296 11.72 In the margins of the lists, the following note have been had-written. Net income 27,000 Short-term note (10,000) Prepaid expenses 7,250 G&A expenses 16,500 All other current liabilities are trade accounts. Property, plant, and equipment are the only noncurrent assets Prior years' depreciation 90,000 Property, plant, and equipment has an estimated 20 year life. Notes payable are the only noncurrent liabilities. The effective interest rate on short-term notes The effective interest rate on long-term notes) No investment securities 8% 8% 27,000 Cash balance total Based on the information presented above, complete the financial statements from which the ratios were calculated. Show your calculations to the work area to the right. Failure to show your work will result in no credit for this exercise. 9 50 51 52 Balance Sheet G