Question

Part 1: (See photo) prepare finacial statements: income statement, statement of owners equity, and balance sheet.

Then: perform ratio analysis

a. current ratio

b. quick ratio

c. debt ratio

d. equity ratio

e. debt to equity ratio

f. profit margin for each reporting period

part 2: summarize the firms finacial position based on information in part 1

Extend Your Skills 63 Extend Your Skills EA2-E1 Create Financial Statements for Frozen Fractals Corp. In this exercise, you will create an income statement, statement of owner's equity, and balance sheet in Excel for Frozen Fractals Corp. With the exception of the Jacqueline Elise, Capital account (the balance for which is from 12/1/2016), the company had the following account balances as of 12/31/2016. Accounts Payable Accounts Receivable Auto Expense Cash Furniture Jacqueline Elise, Capital - 12/1/2016 Jacqueline Elise, Drawing $6,000 $4,100 $9,400 $61,000 $8,000 $73,200 $3,000 Land Office Expense Rent Revenue Sales Revenue Supplies Expense Telephone Expense Utilities Expense $27,000 $4,000 $8,500 $41,000 $2,500 $6,100 $3,600 When creating the financial statements, be certain to use the techniques from this chapter to present each in good form.

Answer 1

Income statement
Sales revenue	41,000
Less: Supplies Expenses	2,500
Gross profit	38,500
Rent revenue	8,500
Less: Expenses
Auto	9,400
Office	4,000
telephone	6,100
utilities	3,600
Net Profit	23,900
Statement of Owner's equity
Opening capital	73200
Add: Profits	23,900
Less: Drawings	3000
Closing capital	94,100
Balance Sheet
Assets
Land	27000
Furniture	8000
Cash	61000
Accounts receivable	4100
Total	100100
Liabilities
Capital	94,100
Accounts payable	6000
Total	100,100
Ratios
Current ratio	Current Assets/ Current Liabilities
	(61000+4100)/ 6000
Current ratio	10.85
Quick ratio	Quick Assets/ Current Liabilities
	(61000+4100)/ 6000
Quick ratio	10.85
Debt Ratio	Total Liabilities/Total Assets
	(6000/100100)
Debt Ratio	0.05994
Equity Ratio	Shareholders equity/ Total assets
	(94100/100100)
Equity Ratio	0.94006
Debt to equity ratio	Total Liabilities/ Total equity
	(6000/94100)
Debt to equity ratio	0.063762
Profit margin	Net profit/Sale revenue
	(23900/41000)
	58.29%