Use the information in E5-14 for Carmichael Industries.
In E5-14
A comparative statement of financial position for Carmichael Industries Inc. follows:

Additional information:
1. Net income for the fiscal year ending December 31, 2017, was $129,000.
2. Cash dividends of $60,000 were declared and paid. Dividends paid are treated as financing activities.
3. Bonds payable amounting to $50,000 were retired through issuance of common shares.
4. Land was sold at a gain of $5,000.
5. No equipment was sold during the year.
Instructions
(a) Calculate the current and acid test ratios for 2016 and 2017.
(b) Calculate Carmichael's current cash debt coverage ratio for 2017.
(c) Based on the analyses in (a) and (b), comment on Carmichael's liquidity and financial flexibility.
(d) Calculate Carmichael's payout ratio. Is the ratio too high? What would be a reasonable payout ratio?

CARMICHAEL INDUSTRIES INC. Statement of Financial Position December 31, 2017 December 31 Assets Cash Accounts receivable Inventory Land Equipment Accumulated depreciation-equipment 2017 $ 21,000 104,000 220,000 71,000 260,000 69,000) $607,000 2016 $34,000 54,000 189,000 110,000 200,000 (42,000) $545.000 Total Liabilities and Shareholders' Equity Accounts payable Bonds payable Common shares Retained earnings $52,000 150,000 214,000 191,000 $607,000 $ 59,000 200,000 164,000 122,000 $545,000 Total