resented here are the comparative balance sheets of Hames Incorporated at December 31, 2023 and 2022. Sales for the year ended December 31, 2023, totaled $580,000. HAMES INCORPORATED Balance Sheets December 31, 2023 and 2022 2023 2022 Assets Cash $ 20,000 $ 20,000 Accounts receivable 78,000 72,000 Merchandise inventory 103,000 99,000 Total current assets $ 201,000 $ 191,000 Land 50,000 40,000 Plant and equipment 125,000 110,000 Less: Accumulated depreciation (65,000) (60,000) Total assets $ 311,000 $ 281,000 Liabilities Short-term debt $ 18,000 $ 17,000 Accounts payable 64,400 75,500 Other accrued liabilities 20,000 18,000 Total current liabilities $ 102,400 $ 110,500 Long-term debt 22,000 30,000 Total liabilities $ 124,400 $ 140,500 Stockholders’ Equity Common stock, no par, 100,000 shares authorized 40,000 and 25,000 shares issued, respectively $ 74,000 $ 59,000 Retained earnings: Beginning balance $ 81,500 $ 85,000 Net income for the year 51,100 1,500 Dividends for the year (20,000) (5,000) Ending balance $ 112,600 $ 81,500 Total stockholders’ equity $ 186,600 $ 140,500 Total liabilities and stockholders’ equity $ 311,000 $ 281,000 Required: Calculate ROI for 2023. Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Calculate ROE for 2023. Note: Round your answer to 1 decimal place. Calculate working capital at December 31, 2023.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 4PB

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Question

Presented here are the comparative balance sheets of Hames Incorporated at December 31, 2023 and 2022. Sales for the year ended December 31, 2023, totaled $580,000.

	2023	2022
HAMES INCORPORATED Balance Sheets December 31, 2023 and 2022
Assets
Cash	$ 20,000	$ 20,000
Accounts receivable	78,000	72,000
Merchandise inventory	103,000	99,000
Total current assets	$ 201,000	$ 191,000
Land	50,000	40,000
Plant and equipment	125,000	110,000
Less: Accumulated depreciation	(65,000)	(60,000)
Total assets	$ 311,000	$ 281,000
Liabilities
Short-term debt	$ 18,000	$ 17,000
Accounts payable	64,400	75,500
Other accrued liabilities	20,000	18,000
Total current liabilities	$ 102,400	$ 110,500
Long-term debt	22,000	30,000
Total liabilities	$ 124,400	$ 140,500
Stockholders’ Equity
Common stock, no par, 100,000 shares authorized 40,000 and 25,000 shares issued, respectively	$ 74,000	$ 59,000
Retained earnings:
Beginning balance	$ 81,500	$ 85,000
Net income for the year	51,100	1,500
Dividends for the year	(20,000)	(5,000)
Ending balance	$ 112,600	$ 81,500
Total stockholders’ equity	$ 186,600	$ 140,500
Total liabilities and stockholders’ equity	$ 311,000	$ 281,000

Required:

Calculate ROI for 2023.
Note: Do not round intermediate calculations. Round your final answer to 2 decimal places.
Calculate ROE for 2023.
Note: Round your answer to 1 decimal place.
Calculate working capital at December 31, 2023.
Calculate the current ratio at December 31, 2023.
Note: Round your answer to 2 decimal places.
Calculate the acid-test ratio at December 31, 2023.
Note: Round your answer to 2 decimal places.
Assume that on December 31, 2023, the treasurer of Hames decided to pay $15,000 of accounts payable. What impact, if any, this payment will have on the answers you calculated for parts a−d (increase, decrease, or no effect).
Assume that instead of paying $15,000 of accounts payable on December 31, 2023. Hames collected $15,000 of accounts receivable. What impact, if any, this receipt will have on the answers you calculated for parts a−d (increase, decrease, or no effect).