Chapter 03 Canvas Assignment – Calculating Ratios
Presented below are the comparative balance sheets of Jay’s Painting Studio, Inc., at December 31, 2020, and 2019. Sales for the year ended December 31, 2020, totaled $1,780,000.
JAY'S PAINTING STUDIO, INC.
Balance Sheets
December 31, 2020, and 2019
2020
2019
Assets
Cash
$
90,000
$
98,000
Accounts receivable
268,000
212,000
Merchandise inventory
402,000
394,000
Total cu
ent assets
$
760,000
$
704,000
Land
132,000
120,000
Plant and equipment
728,000
650,000
Less: Accumulated depreciation
(372,000
)
(314,000
)
Total assets
$
1,248,000
$
1,160,000
Liabilities
Short-term debt
$
98,000
$
86,000
Accounts payable
184,000
168,000
Other accrued liabilities
128,000
134,000
Total cu
ent liabilities
$
410,000
$
388,000
Long-term debt
174,000
214,000
Total liabilities
$
584,000
$
602,000
Stockholders' Equity
Common stock, no par, 100,000 shares authorized, 35,000 and 28,000 shares issued, respectively
$
204,000
$
156,000
Retained earnings:
Beginning balance
402,000
336,000
Net income for the yea
148,000
134,000
Dividends for the yea
(90,000
)
(68,000
)
XXXXXXXXXXEnding balance
$
460,000
$
402,000
XXXXXXXXXXTotal stockholders' equity
$
664,000
$
558,000
Total liabilities and stockholders' equity
$
1,248,000
$
1,160,000
Required:
A) Calculate ROI for XXXXXXXXXXround final answer to one decimal place)
B) Calculate ROE for XXXXXXXXXXround final answer to one decimal place)
C) Calculate working capital at December 31, XXXXXXXXXXround final answer to whole dollars)
D) Calculate the cu
ent ratio at December 31, XXXXXXXXXXround final answer to two decimal places)
E) Calculate the acid-test ratio at December 31, XXXXXXXXXXround final answer to two decimal places)