Question

The following accounts (in no particular order) are for PerfectReb Corporation for the fiscal year ended December 31, 2015. (S/T =Short-Term; L/T = Long-Term)

REQUIRED:

A) Calculate Perfect Reb Corporation’s netincome or net loss for the 2015 fiscal year. You may solve this inany

manner that you wish, but it is highly recommended to prepare amultiple step income statement.

B) Using proper form, prepare Perfect RebCorporation’s balance sheet for 2015.

C) Using the information provided, solve forthe requested ratios and respond to the correspondingquestions.

Common Stock (13,000 shares outstanding)	$52,000		Sales Discounts	$5,000
Accrued Expenses (Payables)	20,000		Income Tax Expense (25% of IBIT)	???
Miscellaneous Operating Expenses	50,000		Cash	142,000
Accounts Receivable	20,000		Interest Expense	4,000
Buildings	186,000		Marketable Securities	62,000
Retained Earnings	???		Notes Payable (due in 5 years)	12,000
Wages Expense	60,000		Rent Expense	11,000
Inventory	40,000		Unearned Revenue	19,000
Accumulated Depreciation – Buildings	48,000		Allowance for Uncollectible Accounts	15,000
Accounts Payable	41,000		Sales	433,000
Gain on Sale of Equipment	62,000		Mortgage Payable ($12,000 S/T)	144,000
Land	50,000		Sales Returns & Allowances	12,000
Bad Debt Expense	2,000		Depreciation Expense	11,000
L/T Investments	7,000		Cost of Goods Sold	109,000
Notes Receivable ($2,000 S/T)	13,000		Interest Revenue	3,000

A) NET INCOME (10 points) – SHOW ALL WORK ANDCALCULATIONS!!!!

B) CLASSIFIED BALANCE SHEET (15 points)

Perfect Reb Corporation Balance Sheet December 31,2015
ASSETS				LIABILITIES
Current Assets				Current Liabilities
				Total Current Liabilities
Total Current Assets
Long-Term Assets				Long-Term Liabilities
Total Long-Term Assets				Total Long Term Liabilities
Fixed Assets
				Total Liabilities
				EQUITY
Total Fixed Assets
				Total Equity
TOTAL ASSETS				TOTAL LIABILITIES & EQUITY

C) RATIOS AND ANALYSIS (15 points):

Use the financial statements and additional information tocalculate the ratios. Round your answers to two decimalplaces. Be sure to label your answer correctly (example,%, times, days, etc.). IF AN ANSWER SHOULD BE EXPRESSED ASA PERCENTAGE, DO NOT LEAVE IT IN DECIMAL FORM!!!! (i.e. 0.5015 =50.15%!!!!)

Previous (December 31, 2014) year end balancesfor:

Accounts receivable, net of allowanceInventory

Stockholders’ Equity

Market price per share for one share of common stock atDec 31, 2015 Dividend per share for one share of common stock forFYE Dec 31, 2015

$2,000 15,000 139,000

$94.50/share $1.25/share

No new shares of common stock were issued during 2015.The company’s credit policy is net 15.

RATIO	CALCULATION	ANSWER
1) Quick (Acid-Test) Ratio (2points)
2) Dividend Yield (2points)
3) Gross Profit Percentage (2points)
4) Average Days’ Sales Uncollected 2points)
5) Inventory Turnover (2points)
6) Price-Earnings Ratio (2points)

7) Using the liquidity ratios (and generalaccepted norms for the current ratio and quick/acid-test ratio),comment on the company’s financial position. (3points)