ACCOUNTING 113-Profitability, Liquidity, and Solvency Ratios Shannon

Question 1Profitability, Liquidity, and Solvency Ratios Shannon Corporation gathered the following informationfrom its 2016 financial statements:Net Sales $185,000 Net Income 35,200 Cash provided by Operating Activities 35,000 Expenditures on Property, Plant and Equipment 15,000Current Assets 40,500 Current Liabilities 27,000 Total Assets 135,000 Total Liabilities 97,500 Using the above data, calculate the following (1) return on sales ratio, (2) current ratio, (3) debt-to-totalassets ratio, and (4) free cash flow. (Round return on sales and debt-to-total assets ratios to one decimalpoint and round current ratio to two decimal points.)Return on Sales Ratio Current Ratio Debt-to Total Assets Ratio Free Cash Flow Answer % Answer Answer $Answer % Question 2Multi-step Income Statement and Adjusting EntriesThe Boston Trading Company, whose accounting year ends on December 31, had the following normalbalances in its general ledger at December 31:Cash $15,000 Accounts Receivable 56,600 Inventory 74,000 Prepaid Insurance 3,000 Office Supplies 4,200 Furniture & Fixtures 21,000 Accumulated Depreciation – Furn. & Fixtures 7,000 Delivery Equipment 86,000 Accumulated Depreciation – Delivery Equipment 12,000Accounts Payable 43,000 Long-term Notes Payable 28,000 Common Stock 70,000 Retained Earnings 56,400 Sales Revenue 610,000 Cost of Goods Sold 394,000 Utilities Expense 4,800 Sales Salaries Expense 77,000 Delivery Expense 10,800 Advertising Expense 5,600 Rent Expense 9,400 Office salaries expense 56,000 Income Tax Expense 9,000 During the year, the accounting department prepared monthly statements but no adjusting entries weremade in the journals and ledgers. Data for the year-end procedures are as follows:1. Prepaid insurance, December 31 $1,500 2. Depreciation Expense on furniture and fixtures for year $2,000 3. Depreciation Expense on delivery equip. for the year $11,000 4. Salaries Payable, December 31 ($1,800 Sales and $1,200 Office) $3,0005. Unused office supplies on December 31 $1,200 Requireda. Record the necessary adjusting entries at December 31.b. Prepare a multi-step income statement for the year. Combine all the operating expenses into one lineon the income statement for selling, general and administrative expenses. a.General Journal Date Description Dec 31 Answer. Ref.1 Debit Credit Answer Answer General Journal Date Description Ref. Debit Credit 0 0 Answer Answer 0 Answer0 To record expired insurance. 31 Answer Answer2 0 Answer Answer 0 Answer0 Answer0 To record depreciation expense for furniture for the year. 31 Answer Answer3 0 Answer Answer 0 Answer0 Answer0 To record depreciation expense for delivery equipment forthe year. 31 Salaries Expense 4 Answer Answer General Journal Date Description Ref. Debit Credit 0 0 Answer Answer 0 Answer Answer 0 Answer0 Answer0 To record accrued salaries at December 31. 31 Answer Answer 5 0 Answer Answer 0 To record office supplies used. b. Do not use negative signs with your answers.BOSTON TRADING COMPANYIncome StatementFor the Year Ended December 31 Answer $Answer 0 Answer0 Answer0 BOSTON TRADING COMPANYIncome StatementFor the Year Ended December 31 Answer Gross Profit on Sales Answer Answer 0 0 Operating ExpensesAnswer Income before Income Taxes Answer Net Income Answer Answer 0 0 Answer0 $Answer0 Question 3Ratio Analysis The following balances were reported in the financial statements for Nafooz Company.2016 2015 Net Sales $1,000,000 $750,000 Net Income 150,000 80,000 Current Assets 220,000 180,000 Current Liabilities 80,000 90,000 Total Liabilities 300,000 250,000 Total Assets 800,000 600,000 RequiredCompute the following ratios for 2016 and 2015 for Nafooz Company.(Round answers to one decimal place.) 2016 Answera. Return on sales ratio 2015 0 %b. Current ratio Answer 0 Answer % 0 Answer0 c. Debt-to-total-assets ratio 0 % Answer Check Answer 0 %