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In: Accounting

The MBA802 Company failed to record (accrue) $9,000,000 of cost related to vendor invoices and warranty...

The MBA802 Company failed to record (accrue) $9,000,000 of cost related to vendor invoices and warranty liability at year-end. With this omission, the company's summary financial statements were stated as follows:

Summarized Income Statement

Sales $97,000,000

All Cost (incl. Interest & Taxes)   $83,000,000

Net Income    $14,000,000

Summarized Balance Sheet

This Year     Last Year

Assets:

All Current Assets combined $74,000,000 $68,000,000

All Long-Term Assets combined $61,000,000    $59,000,000

Total Assets: $135,000,000      $127,000,000

Liabilities & Stockholders Equity

All Current Liabilities combined $61,000,000    $57,000,000

All Long-Term Liabilities combined $35,000,000   $45,000,000

Stockholders Equity $39,000,000    $25,000,000

Total Liabilities & Equity $135,000,000    $127,000,000

Answer the following questions:

Current Ratio per Company Statements? 1.21

Current Ratio if Statements Fixed This Error? 1.06

Would the Current Ratio Be Better or Worse? Worse

ROI per Company Statements?

ROI if Statements Fixed This Error?

Would the ROI be Better or Worse? Worse

ROE per Company Statements?

ROE if Statements Fixed This Error?

Would the ROE be Better or Worse? Worse

Important Notes Regarding How You Should Input Your Answers :

Display Current Ratio in the following format only   x.xx (in other words, go to 2 decimal points)

Display ROI and ROE responses in the following format only    x.x% (in other words, go to one decimal point and include the percentage sign)

Display the Better/Worse responses only using one of the following 2 choices: Better Worse

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