PART $3(40$ pts$)$: Individual questions

Question $1(10$ pts$)$: Common$-$size and trend percents for Roxi Company's sales, cost of goods sold, and expenses follow. Please try to calculate an indicative net income for the following years. After calculating indicative net income values, please explain whether these values increase, decrease, or remain unchanged in these three years. $($Show all your calculations, please. Only the answer of increase$/$decrease will not be accepted$)$

Answer:

Question $2(5$ pts$)$: Explain the possible reason$($s$)$ if a company's current ratio increases while the quick ratio decreases in time. Question $3(25$ pts$)$: On January $1,5$G Company reported current assets of $\backslash$$$194,400$ and current liabilities of $\backslash (\backslash$$ $162,000\backslash ).$ Compute total current assets, total current liabilities, and the current ratio on January $1$ and after each of the following transactions.

January $5$ Purchased equipment to be used in operations for $\backslash$$$48,600$ cash.

$4$

January $12$ Paid $\backslash$$$13,500$ cash for accounts payable.

January $18$ Acquired a building in exchange for a $\backslash$$$267,300$ long$-$term note payable, first payment to occur in $3$ years.

January $22$ Purchased $\backslash$$$32,400$ of merchandise on credit, terms n$/45.$

January $31$ Sold outdated machinery for $\backslash$$$34,290$ cash.

First, show the change $($with a $+/-$ sign$)$ in the CA $\backslash$& CL sections based on the transactions provided above. Then, calculate the balance for CA $\backslash$& CL and calculate the current ratio after the change. And observe how the current ratio fluctuates after each transaction. $($Only answers should be given. No partial credit!$)$

$\backslash$begin$\{$tabular$\}\{|$l$|$c$|$c$|$c$|\}$

$\backslash$hline Transaction Date & Current Assets & Current Liabilities & Current Ratio $\backslash \backslash$

$\backslash$hline $\backslash$begin$\{$tabular$\}\{$l$\}$

Beginning Balance, January $1\backslash \backslash$

$($example$)$

$\backslash$end$\{$tabular$\}$ & $\backslash (\backslash$$ $194,400\backslash )$ & $\backslash (\backslash$$ $162,000\backslash )$ & $1,0125\backslash \backslash$

$\backslash$hline January $5-$ transaction info & & & N$/$A $\backslash \backslash$

$\backslash$hline Balance, after January $5$ & & & $\backslash \backslash$

$\backslash$hline January $12-$ transaction info & & & N$/$A $\backslash \backslash$

$\backslash$hline Balance, after January $12$ & & & N$/$A $\backslash \backslash$

$\backslash$hline January $18-$ transaction info & & & N$/$A $\backslash \backslash$

$\backslash$hline Balance, after January $18$ & & & $\backslash \backslash$

$\backslash$hline January $22-$ transaction info & & & N$/$A $\backslash \backslash$

$\backslash$hline Balance, after January $22$ & & & $\backslash \backslash$

$\backslash$hline January $31-$ transaction info & & & $\backslash \backslash$

$\backslash$hline Balance, after January $31$ & & & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$