THE ATHLETIC ATTIC
Income Statement
For the year ended December 31, 2021
Net sales
$8,770,000
Cost of goods sold
$5,385,000
Gross profit
$3,385,000
Expenses:
Operating expenses
$1,535,000
Depreciation expense
$197,000
Interest expense
$37,000
Income tax expense
$347,000
Total expenses
$2,116,000
Net income
$1,269,000
THE ATHLETIC ATTIC
Balance Sheets
December 31
2021
2020
Assets
Current assets:
Cash
$151,000
$201,000
Accounts receivable
$725,000
$745,000
Inventory
$1,340,000
$1,010,000
Supplies
$97,000
$72,000
Long-term assets:
Equipment
$1,085,000
$1,085,000
Less: Accumulated depreciation
($394,000)
($197,000)
Total assets
$3,004,000
$2,916,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$102,000
$78,000
Interest payable
$0
$3,700
Income tax payable
$33,500
$29,700
Long-term liabilities:
Notes payable
$470,000
$470,000
Stockholders' equity:
Common stock
$570,000
$570,000
Retained earnings
$1,828,500
$1,764,600
Total liabilities and stockholders’ equity
$3,004,000
$2,916,000
Required:
Assuming that all sales were on account, calculate the following
risk ratios for 2021. (Use 365 days a year. Round your
intermediate and final answers to 1 decimal place.)
Risk Ratios
1. Receivables turnover ratio
times
2. Average collection period
days
3. Inventory turnover ratio
times
4. Average days in inventory
days
5. Current ratio
to 1
6. Acid-test ratio
to 1
7. Debt to equity ratio
%
8. Times interest earned
ratio
times
