The 2021 income statement of Adrian Express reports sales of $16,281,000, cost of goods sold of $9.851,500, and net income of$1,610,000. Balance sheet information is provided in the following table.ADRIAN EXPRESSBalance SheetsDecember 31, 2021 and 202020212020AssetsCurrent assets:CashAccounts receivableInventoryLong-term assets$ 610, 000 $ 770,0001,420, e001,820, e004,810, 000$8,660, e001,010, e001,410, e004,250, 000$7,440, e00Total assetsLiabilities and Stockholders' Equity$1,670, e002,410, e001,990, 0001,370, 000Current liabilities$2,010, e002,310, e001,990, e002,350, e00$8,660, e00 $7,440, e00Long-term liabilitiesCommon stockRetained earningsTotal liabilities and stockholders' equityIndustry averages for the following four risk ratios are as follows:Average collection periodAverage days in inventoryCurrent ratio25 days60 days2 to 1Debt to equity ratio50%Requlred:1. Calculate the four risk ratios listed above for Adrian Express in 2021. (Use 365 days In a year. Round your answers to 1 declmalplace.)Risk RatiosAverage collection period26.0 daysAverage days in inventorydaysCurrent ratioto 1Debt to equity ratio9%2. Do you think the company is more risky or less risky than the industry average?O More riskyO Less risky The following income statement and balance sheets for Virtual Gaming Systems are provided.VIRTUAL GAMING SYSTEMSIncome StatementFor the year ended December 31, 2021$3,031, e001,949, e00Net salesCost of goods soldGross profitExpenses:Operating expensesDepreciation expenseLoss on sale of land1,882, e00$857, 80026, 5007,90014,50047,000Interest expenseIncome tax expenseTotal expenses952,900Net income$ 129,100VIRTUAL GAMING SYSTEMSBalance SheetsDecember 3120212020AssetsCurrent assets:Cash$185, e0080, e00184, 00011,900$143,00059, e00134, e005, 880Accounts receivableInventoryPrepaid rentLong-term assets:Investment in bondsLandEquipmentLess: Accumulated depreciation184, e00209, e00269, e00(67, 500)239, e00209, e00(41, e00)$748, 880Total assets$895,400Liabilities and Stockholders' EquityCurrent liabilities:Accounts payableInterest payableIncome tax payable$ 65,0005,80014, 500$ 80, e002,90013,900Long-term liabilities:Notes payableStockholders' equity:284, e00224, e00299, e00227, 100299, e0e129, 080Common stockRetained earningsTotal liabilities and stockholders' equity$895,400$748, 880Requlred:Assuming that all sales were on account, calculate the following risk ratios for 2021. (Use 365 days a year. Round your finel answersto 1 decimal place.)Risk Ratios1. Receivables turnover ratio35.7 times2. Average collection period3.15.6 daysInventory turnover ratio4. Average days in inventory5. Current ratio4.2 times3.7 days27.9 to 16.Acid-test ratio22.70 to 17. Debt to equity ratio8. Times interest earned ratiotimes

Risk ratios refers to the way of measuring the risk involved in a certain type of event happening in…

The 2021 income statement of Adrian Express reports sales of $16,281,000, cost of goods sold of $1,610,000. Balance sheet information is provided in the following table. ADRIAN EXPRESS Balance Sheets December 31, 2821 and 2020 2021 2020 Assets Current assets: Cash Accounts receivable Inventory Long-term assets $ 610, e00 $ 770, e00 1,420, 000 1,820, 000 4,810, e00 $8,660, e00 $7,440, 000 1,010, e0e 1,410, e0e 4,250,000 Total assets Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Common stock Retained earnings $2,010, e0e $1,678,e00 2,310, e0e 1,990, e0e 2,350,000 2,410, 000 1,990, eee 1,370,800

The 2021 income statement of Adrian Express reports sales of $16,281,000, cost of goods sold of $1,610,000. Balance sheet information is provided in the following table. ADRIAN EXPRESS Balance Sheets December 31, 2821 and 2020 2021 2020 Assets Current assets: Cash Accounts receivable Inventory Long-term assets $ 610, e00 $ 770, e00 1,420, 000 1,820, 000 4,810, e00 $8,660, e00 $7,440, 000 1,010, e0e 1,410, e0e 4,250,000 Total assets Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Common stock Retained earnings $2,010, e0e $1,678,e00 2,310, e0e 1,990, e0e 2,350,000 2,410, 000 1,990, eee 1,370,800

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter12: The Statement Of Cash Flows

Section: Chapter Questions

Problem 12.7E

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