Complete the following problem sets of Financial Accounting: (P2-6A) & (P13-2A) P2-6A Condensed balance sheet and income statement data for Sadecki Corporation are presented here and on the next page. Compute and interpret liquidity, solvency, and profitability ratios . (LO 2, 4, 5), AP SADECKI CORPORATION Balance Sheets December 31 Assets 2014 2013 Cash $ 28,000 $ 20,000 Receivables (net) 70,000 62,000 Other current assets 90,000 73,000 Long-term investments 62,000 60,000 Property, plant, and equipment (net) 510,000 470,000 Total assets $760,000 $685,000 Liabilities and Stockholders’ Equity Current liabilities $ 75,000 $ 70,000 Long-term liabilities 80,000 90,000 Common stock 330,000 300,000 Retained earnings 275,000 225,000 Total liabilities and stockholders’ equity $760,000 $685,000 SADECKI CORPORATION Income Statements For the Years Ended December 31 2014 2013 Sales revenue $750,000 $680,000 Cost of goods sold 440,000 400,000 Operating expenses (including income taxes) 240,000 220,000 Net income $ 70,000 $ 60,000 Additional information: Net cash provided by operating activities $82,000 $56,000 Cash used for capital expenditures $45,000 $38,000 Dividends paid $20,000 $15,000 Average number of shares outstanding 33,000 30,000 Instructions Compute these values and ratios for 2013 and 2014. · (a) Earnings per share. · (b) Working capital. · (c) Current ratio. · (d) Debt to assets ratio. · (e) Free cash flow. · (f) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2013 to 2014 of Sadecki Corporation. P13-2A The comparative statements of Osborne Company are presented here. Compute ratios from balance sheets and income statements . (LO 6), AP OSBORNE COMPANY Income Statements For the Years Ended December 31 2014 2013 Net sales $1,890,540 $1,750,500 Cost of goods sold 1,058,540 1,006,000 Gross profit 832,000 744,500 Selling and administrative expenses 500,000 479,000 Income from operations 332,000 265,500 Other expenses and losses Interest expense 22,000 20,000 Income before income taxes 310,000 245,500 Income tax expense 92,000 73,000 Net income $ 218,000 $ 172,500 OSBORNE COMPANY Balance Sheets December 31 Assets 2014 2013 Current assets Cash $ 60,100 $ 64,200 Debt investments (short-term) 74,000 50,000 Accounts receivable 117,800 102,800 Inventory 126,000 115,500 Total current assets 377,900 332,500 Plant assets (net) 649,000 520,300 Total assets $1,026,900 $852,800 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 160,000 $145,400 Income taxes payable 43,500 42,000 Total current liabilities 203,500 187,400 Bonds payable 220,000 200,000 Total liabilities 423,500 387,400 Stockholders’ equity Common stock ($5 par) 290,000 300,000 Retained earnings 313,400 165,400 Tota.