Natalie and Curtis have comparative balance sheets and income statements for Cookie & Coffee Creations, Inc

Natalie and Curtis have comparative balance sheets and income statements for Cookie & Coffee Creations, Inc. They have been told that they can use these financial statements to prepare horizontal and vertical analyses, to calculate financial ratios, to analyze how their business is doing, and to make some decisions they have been considering. Below, you are provided with the balance sheet and income statement of Cookie & Coffee Creations Inc. for its first year of operations; the year ended October 31, 2021. Review the calculations below, and then review the additional case information to calculate the ratios. (REFER TO ATTACHED IMAGE) Review the additional case information below. Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more equipment. The loan would be repaid over a 4-year period. The terms of the loan provide for equal semi-annual installment payments of $2,500 on May 1 and November 1 of each year, plus interest of 5% on the outstanding balance. Dividends on preferred stock were $1,400. Since this is the first year of operations and the beginning balances are zero, use the ending balance as the average balance where appropriate. Complete the tasks listed below. Calculate the following ratios: current ratio, accounts receivable turnover, inventory turnover, Transcribed Image Text: COOKIE & COFFEE CREATIONS INC.
Balance Sheet
October 31, 2021
Assets
Current assets
Cash
Accounts receivable
$32,219
3,250
17,897
6.300
Inventory
Prepaid Rent
Property, plant, and equipment
Équipment
Accumulated depreciation-equipment
Total assets
$59,666
$99,700
(9,850)
89,850
$149.516
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable
Income taxes payable
Dividends payable
Salaries and wages payable
Interest payable
Notes payable current portion
Long-term liabilities
Notes payable-long-term portion
Total liabilities
Stockholders’ equity
Paid-in capital
Preferred stock, 2,800 shares issued and outstanding
Common stock, 25,930 shares issued, 25,180 outstanding
$5,786
18,500
700
2,250
250
4.000
$31,486
6.000
37,486
$14,000
25.930
Retained earnings
Total paid-in capital and retained earnings
Less: Treasury stock-common (750 shares), at cost
Total stockholders’ equity
Total liabilities and stockholders’ equity
39,930
72,600
112,530
500
112.030
$149.516
COOKIE & COFFEE CREATIONS INC.
Income Statement
Year Ended October 31, 2021
Sales Revenue
$462,500
231,250
231,250
Cost of goods sold
Gross profit
Operating expenses
Salaries and wages expense
Depreciation expense
Other operating expenses
Income from operations
Other expenses
Interest expense
Income before income tax
$92,500
9,850
35.850
138.200
93,050
550
Income tax expense
Net income
92,500
18.500
$74,000

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