The following income statement and balance sheets for Virtual Gaming Systems are provided.

VIRTUAL GAMING SYSTEMS

Income Statement

For the Year Ended December $31,2024$

Net sales $$3,021,000$

Cost of goods sold $1,947,000$

Gross profit $1,074,000$

Expenses:

Operating expenses $$855,000$

Depreciation expense $25,500$

Loss on sale of land $7,700$

Interest expense $13,500$

Income tax expense $45,000$

Total expenses $946,700$

Net income $$127,300$

VIRTUAL GAMING SYSTEMS

Balance Sheets

December $31$

$20242023$

Assets

Current assets:

Cash $$183,000$ $$141,000$

Accounts receivable $78,00057,000$

Inventory $102,000132,000$

Prepaid rent $11,7005,640$

Long$-$term assets:

Investment in bonds $102,0000$

Land $207,000237,000$

Equipment $267,000207,000$

Less: Accumulated depreciation $(64,500)(39,000)$

Total assets $886,200$ $$740,640$

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $$63,000$ $$78,000$

Interest payable $5,4002,700$

Income tax payable $13,50013,700$

Long$-$term liabilities:

Notes payable $282,000222,000$

Stockholders' equity:

Common stock $297,000297,000$

Retained earnings $225,300127,240$

Total liabilities and stockholders$$ equity $$886,200$ $$740,640$

Required:

Assuming that all sales were on account, calculate the following risk ratios for $2024.($Use $365$ days a year. Round your final answers to $1$ decimal place.$)$ Risk Ratios

$1.$ Receivables turnover ratio times

$2.$ Average collection period days

$3.$ Inventory turnover ratio times

$4.$ Average days in inventory days

$5.$ Current ratio

$6.$ Acid$-$test ratio

$7.$ Debt to equity ratio $\%$

$8.$ Times interest earned ratio

 

Answer rating: 100% (QA)

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