Question

The comparative financial statements for Prince Company are below: Year 2 Year 1 Income statement: Sales revenue $ 191,000 $ 168,500 Cost of goods sold 112,900 100,300 Gross profit 78,100 68,200 Operating expenses and interest expense 57,000 54,000 Pretax income 21,100 14,200 Income tax 6,330 4,260 Net income $ 14,770 $ 9,940 Balance sheet: Cash $ 4,600 $ 5,200 Accounts receivable (net) 14,600 17,500 Inventory 41,200 32,800 Property and equipment (net) 45,700 37,000 Total assets $ 106,100 $ 92,500 Current liabilities (no interest) $ 14,400 $ 15,400 Long-term liabilities (9 interest) 43,100 43,100 Common stock ($5 par value, 5,600 shares outstanding) 28,000 28,000 Retained earnings 20,600 6,000 Total liabilities and stockholders' equity $ 106,100 $ 92,500 1. Complete the following columns for each item in the preceding comparative financial statements: (Round your percentage answers to 2 decimal places.(i.e., 0.1234 should be entered as 12.34). Decreases should be indicated by a minus sign.) 2. By what amount did the current ratio change? (Round your intermediate calculations and final answer to 2 decimal places.) 2. By what amount did the current ratio change? (Round your intermediate calculations and final answer to 2 decimal places.)

Answer 1

2)

Current ratio = Total current assets / Total current liabilities