Ray Corporation Comparative Balance Sheets for 2019 & 20

2020 2019

Assets
Cash Tk. 16,500 Tk. 57,400
Accounts Receivable 80,000 58,000
Inventory 120,000 70,000
Prepaid Expenses 25,500 32,000
Land 175,000 120,000
Equipment 225,000 200,000
Accumulated Depreciation (45,000) (50,000)
Total Assets Tk. 597,000 Tk. 487,400
Liabilities and Stockholders’ Equity
Accounts Payable Tk. 70,800 Tk. 47,000
Salaries Payable 17,200 26,900
Bonds Payable 196,000 142,000
Total Liabilities 284,000 215,900
Common Stock 39,000 51,000
Retained Earnings 274,000 220,500
Total Stockholders’ Equity 313,000 271,500
Total Liabilities and Stockholders’ Equity Tk. 597,000 Tk. 487,400

Ray Corporation
Income Statement
For the year ended December 31, 2020

Tk.
Net Sales 800,000
Cost Of Goods Sold (350,000)
Gross Profit 450,000
Expenses (180,000)
Income Before Income Taxes and Interest Expense 270,000
Interest Expense (50,000)
Income Before Income Taxes 220,000
Income Tax Expense (160,000)
Net Income 60,000

Additional data:
1. New equipment costing Tk. 80,000 was purchased for cash during the year.

2. Old equipment costing Tk. 55,000 with a book value of Tk. 27,500 was sold for Tk. 12,500 cash.
3. Cash dividends of Tk. 19,000 were declared and paid.
4. Depreciation expense of Tk. 35,000 is included in the operating expenses.
5. Land was purchased for cash
Required:
1. Prepare a statement of cash flows for 2020 using the indirect method.
Compute the following 3 ratios for 2020: (1 point for the formula and 1 point for the calculation) Profit
margin, Accounts Receivable turnover ratio, and Acid Test ratio