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Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds. Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable VIRTUAL GAMING SYSTEMS Balance Sheets December 31 Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity oblem 12-6A (Algo) Part 1 2025 $199,500 73,500 123,500 13,700 102,000 297,000 297,000 (91,500) $1,014,700 $213,600 8,100 11,700 370,000 297,000 114,300 $1,014,700 2024 $183,000 78,000 102,000 11,700 102,000 207,000 267,000 (64,500) $886, 200 $63,000 5,400 13,500 282,000 297,000 225,300 $886,200 2023 $141,000 57,000 132,000 5,640 237,000 207,000 (39,000) $740,640 $105,740 2,700 13,700 222,000 297,000 99,500 $740,640

Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds. Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable VIRTUAL GAMING SYSTEMS Balance Sheets December 31 Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity oblem 12-6A (Algo) Part 1 2025 $199,500 73,500 123,500 13,700 102,000 297,000 297,000 (91,500) $1,014,700 $213,600 8,100 11,700 370,000 297,000 114,300 $1,014,700 2024 $183,000 78,000 102,000 11,700 102,000 207,000 267,000 (64,500) $886, 200 $63,000 5,400 13,500 282,000 297,000 225,300 $886,200 2023 $141,000 57,000 132,000 5,640 237,000 207,000 (39,000) $740,640 $105,740 2,700 13,700 222,000 297,000 99,500 $740,640

Corporate Fin Focused Approach
Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter3: Analysis Of Financial Statements
Section: Chapter Questions
Problem 15SP
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! Required information Problem 12-6A (Algo) Use ratios to analyze risk and profitability (LO12-3, 12-4) [The following information applies to the questions displayed below.] Income statements and balance sheets data for Virtual Gaming Systems are provided below. Net sales Cost of goods sold Gross profit Expenses: VIRTUAL GAMING SYSTEMS Income Statements For the Years Ended December 31 2025 $3,495,000 2,477,000 1,018,000 Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Net income 952,000 27,000 16,500 7,700 1,003, 200 14,800 2024 $3,021,000 1,947,000 1,074,000 855,000 25,500 7,700 13,500 46,500 948, 200 125,800
Transcribed Image Text:! Required information Problem 12-6A (Algo) Use ratios to analyze risk and profitability (LO12-3, 12-4) [The following information applies to the questions displayed below.] Income statements and balance sheets data for Virtual Gaming Systems are provided below. Net sales Cost of goods sold Gross profit Expenses: VIRTUAL GAMING SYSTEMS Income Statements For the Years Ended December 31 2025 $3,495,000 2,477,000 1,018,000 Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Net income 952,000 27,000 16,500 7,700 1,003, 200 14,800 2024 $3,021,000 1,947,000 1,074,000 855,000 25,500 7,700 13,500 46,500 948, 200 125,800
Required information Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds. Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity Problem 12-6A (Algo) Part 1 Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio 2024 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 times times % 2025 times times 2025 % $199,500 73,500 123,500 13,700 102,000 297,000 297,000 (91,500) $1,014,700 $213,600 8,100 11,700 370,000 297,000 114,300 $1,014,700 2024 $183,000 78,000 102,000 11,700 102,000 207,000 Required: 1. Assuming that all sales were on account, calculate the following risk ratios for 2024 and 2025: (Round your answers to 1 decimal place.) 267,000 (64,500) $886,200 $63,000 5,400 13,500 282,000 297,000 225,300 $886, 200 2023 $141,000 57,000 132,000 5,640 0 237,000 207,000 (39,000) $740,640 $105,740 2,700 13,700 222,000 297,000 99,500 $740,640
Transcribed Image Text:Required information Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds. Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity Problem 12-6A (Algo) Part 1 Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio 2024 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 times times % 2025 times times 2025 % $199,500 73,500 123,500 13,700 102,000 297,000 297,000 (91,500) $1,014,700 $213,600 8,100 11,700 370,000 297,000 114,300 $1,014,700 2024 $183,000 78,000 102,000 11,700 102,000 207,000 Required: 1. Assuming that all sales were on account, calculate the following risk ratios for 2024 and 2025: (Round your answers to 1 decimal place.) 267,000 (64,500) $886,200 $63,000 5,400 13,500 282,000 297,000 225,300 $886, 200 2023 $141,000 57,000 132,000 5,640 0 237,000 207,000 (39,000) $740,640 $105,740 2,700 13,700 222,000 297,000 99,500 $740,640
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