need solution Shown below are selected data from the financial statements of Ahmed Stores, a retail lighting store:From the balance sheet:Cash ..Accounts receivableInventory . .Plant assets (net of accumulated depreciation)Current liabilitiesTotal stockholders' equity$ 5,00015,000.25,00050,00010,00050,0001,30,000Total assets.From the income statement:Net sales...Cost of goods soldOperating expenses.Interest expenseIncome tax expense.Net income$2,40,0001,80,00049,5008,0004,00021,000From the statement of cash flows:Net cash provided by operating activities(including interest paid of $7,000).Net cash used in investing activities .Financing activities:Amounts borrowed..Repayment of amounts borrowed .Dividends paid..Net cash provided by financing activities.Net increase in cash during the year. .$ 5,000(5,000)$ 5,000(2,000)(2,000)8,000$ 4,000Instructionsa. Compute the following (round to one decimal place):1. Current ratio 3. Working capital2. Quick ratio 4. Debt ratiob. Comment on these measurements and evaluate Ahmed's short-term debt-paying ability.c. Compute the following ratios (assume that the year-end amounts of total assets and total stockholders' equity also represent the average amounts throughout the year):1. Return on assets2. Return on equityd. Comment on the company's performance under these measurements. Explain why the return onassets and returm on equity are so different?

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Instructions a. Compute the following (round to one decimal place): 1. Current ratio 3. Working capital 2. Quick ratio 4. Debt ratio b. Comment on these measurements and evaluate Ahmed's short-term debt-paying ability. c. Compute the following ratios (assume that the year-end amounts of total assets and total stock holders' equity also represent the average amounts throughout the year): 1. Return on assets 2. Return on equity

Instructions a. Compute the following (round to one decimal place): 1. Current ratio 3. Working capital 2. Quick ratio 4. Debt ratio b. Comment on these measurements and evaluate Ahmed's short-term debt-paying ability. c. Compute the following ratios (assume that the year-end amounts of total assets and total stock holders' equity also represent the average amounts throughout the year): 1. Return on assets 2. Return on equity

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter11: Accounting For Purchases And Cash Payments

Section: Chapter Questions

Problem 4SEB: COMPUTING GROSS PROFIT The following data were taken from the accounts of Burnside Bedknobs, a...

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COMPUTING GROSS PROFIT The following data were taken from the accounts of Burnside Bedknobs, a retail business. Determine the gross profit.
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