DeBauge Realtors Incorporated is a realty firm owned by Jeff and Kristi DeBauge. The DeBauge family owns 100% of the corporation’s stock. The following summarized data (in thousands) are taken from the December 31, 2022 financial statements:

For the year Ended December 31, 2022
Commissions revenue Cost of services provide Advertising expense Operating income Interest expense Income tax expense Net income	$144 62 28 $54 5 19 $30

At December 31, 2022 Assets
Cash and short-term investments Accounts receivable, net Property, plant, and equipment, net Total assets	$32 45 124 $201

Liabilities and stockholders’ equity
Accounts payable Income taxes payable Notes payable (long term) Paid-in capital Retained earnings Total liabilities and stockholders’ equity	$94 10 49 21 27 $201

At December 31, 2021 total assets were $201 and total stockholders’ equity was $48 . there were no changes in notes payable or paid-in capital during 2022.

Required:

1. What particular expense do you suppose accounts for the largest portion of the $62 cost of service s provided?

ROI: _______ %

Margin: _______ %

Turnover: ________

ROE: ________%

2. The cost of services provide amount includes all operating expenses (i.e., selling, general, and administrative expenses) except advertising expense. What do you suppose the primary reason was for DeBauge Realtors Incorporated to separate advertising from other operating expenses?

_________________________

3. Calculate the effective interest rate on the notes payable for DeBauge Realtors incorporated.

Effective interest rate: ____________ %

4. /Calculate the company’s average income tax rate. (Hint: you must first determine the earnings before taxes)

Average income tax rate: __________%

5. Calculate the amount of dividends declared and paid to Jeff and Kristi DeBauge during the year ended December 31,2022 (Hint: Do a T-account analysis of retained earnings.) what is the company’s dividend policy?(what proportion of the company’s earnings are distributed as dividends?)

Dividends declared and paid in 2022: __________

what is the company’s dividend policy?(what proportion of the company’s earnings are distributed as dividends?) _________________________

6. DeBauge Realtors Incorporated was organized and operates as a corporation rather than a partnership. What is the primary advantage of the corporate form of business to a realty firm?

________________________________

DeBauge Realtors Incorporated was organized and operates as a corporation rather than a relationship. What is the primary disadvantage of the corporate form?________________________

7. Calculate the amount of working capital and the current ratio at December 31, 2022. Assess the company’s overall liquidity.

Working capital _________

Current ratio ___________

Assess the company’s overall liquidity _________________

8. Calculate ROI (including margin and turnover) and ROE for the year ended December 31, 2022

ROI: ___________%

Margin: _________%
Turnover: _________

ROE: ___________%