XYZ Inc. is a retail company that sells clothing and accessories. The company's balance sheet as of
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Question:
XYZ Inc. is a retail company that sells clothing and accessories. The company's balance sheet as of December 31, 2022, shows the following accounts and amounts:
- Cash and cash equivalents: $50,000
- Accounts receivable: $80,000
- Inventory: $120,000
- Property, plant, and equipment: $400,000
- Accumulated depreciation: ($120,000)
- Accounts payable: $60,000
- Long-term debt: $200,000
- Common stock: $150,000
- Retained earnings: $120,000
a) Calculate the current ratio and quick ratio for XYZ Inc. as of December 31, 2022.
b) Calculate the net income for the year ended December 31, 2022, using the following information:
- Sales revenue: $500,000
- Cost of goods sold: $280,000
- Operating expenses: $100,000
- Depreciation expense: $20,000
- Interest expense: $10,000
- Income tax rate: 30%
Related Book For
Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
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