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 The following income statement and balance sheets for Virtual Gaming Systems are provided.
Required:
Assuming that all sales were on account, calculate the following risk ratios for 2021. (Use 365 days a year. Round your final answers to 1 decimal place.)
VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2021 Net sales $2,986,000 Cost of goods sold 1,940,000 Gross profit 1,046,000 Expenses: Operating expenses $848,000 Depreciation expense 22,000 Loss on sale of land 7,000 Interest expense 10,000 Income tax expense 38,000 Total expenses 925,000 Net income $ 121,000
VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2021 2020 $176,000 71,000 95,000 11,000 $134,000 50,000 125,000 4,800 95,000 200,000 260,000 (54,000) $854,000 230,000 200,000 (32,000) $711,800 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 $ 56,000 4,000 10,000 $ 71,000 2,000 13,000 275,000 215,000 290,000 219,000 $854,000 290,000 120, 800 $711,800
Risk Ratios 1. Receivables turnover ratio 2. Average collection period 3. Inventory turnover ratio 4. Average days in inventory 5. Current ratio 6. Acid-test ratio Debt to equity ratio 8. Times interest earned ratio times days times days to 1 to 1 times

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