Question

The following income statement and balance sheets for Virtual Gaming Systems are provided.

VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2018
Net sales		$3,076,000
Cost of goods sold		1,958,000
Gross profit		1,118,000
Expenses:
Operating expenses	$866,000
Depreciation expense	31,000
Loss on sale of land	8,800
Interest expense	19,000
Income tax expense	56,000
Total expenses		980,800
Net income		$ 137,200
VIRTUAL GAMING SYSTEMS Balance Sheets December 31   2018   2017   Assets   Current assets:       Cash $194,000    $152,000          Accounts receivable 89,000    68,000          Inventory 113,000    143,000          Prepaid rent 12,800    6,960    Long-term assets:       Investment in bonds 113,000    0          Land 218,000    248,000          Equipment 278,000    218,000          Less: Accumulated depreciation (81,000) (50,000)            Total assets $936,800    $785,960           Liabilities and Stockholders' Equity   Current liabilities:       Accounts payable $ 74,000    $ 89,000          Interest payable 7,600    3,800          Income tax payable 19,000    14,800      Long-term liabilities:       Notes payable 293,000    233,000      Stockholders' equity:       Common stock 308,000    308,000          Retained earnings 235,200    137,360                Total liabilities and stockholders’ equity $936,800    $785,960       Required: Assuming that all sales were on account, calculate the following risk ratios for 2018. (Use 365 days a year. Round your intermediate calculations 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

Answer 1