Company X failed to record (accrue) $5,000,000 of vendor invoices and warranty liability at year-end. As a result of this omission, the company's summary financial statements were stated as follows: Summarized Income Statement Sales $50,000,000 All Cost (incl. Interest & Taxes) $40,000,000 Net Income $10,000,000 Summarized Balance Sheet This Year Last Year Assets: All Current Assets combined $50,000,000 $40,000,000 All Long-Term Assets combined $50,000,000 $40,000,000 Total Assets: $100,000,000 $80,000,000 Liabilities & Stockholders Equity All Current Liabilities combined $30,000,000 $25,000,000 All Long-Term Liabilities combined $25,000,000 $20,000,000 Stockholders Equity $45,000,000 $35,000,000 Total Liabilities & Equity $100,000,000 $80,000,000 Answer the following questions: Current Ratio per Company Statements? Current Ratio if Statements Fixed This Error? Would the Current Ratio Be Better or Worse once this error is corrected? ROI per Company Statements? ROI if Statements Fixed This Error? Would the ROI be Better or Worse once this error is corrected? ROE per Company Statements? ROE if Statements Fixed This Error? Would the ROE be Better or Worse once this error is corrected? Display the Better/Worse responses only us
Company X failed to record (accrue) $5,000,000 of vendor invoices and warranty liability at year-end. As a result of this omission, the company's summary financial statements were stated as follows:
Summarized Income Statement
Sales $50,000,000
All Cost (incl. Interest & Taxes) $40,000,000
Net Income $10,000,000
Summarized Balance Sheet
This Year Last Year
Assets:
All Current Assets combined $50,000,000 $40,000,000
All Long-Term Assets combined $50,000,000 $40,000,000
Total Assets: $100,000,000 $80,000,000
Liabilities &
All Current Liabilities combined $30,000,000 $25,000,000
All Long-Term Liabilities combined $25,000,000 $20,000,000
Stockholders Equity $45,000,000 $35,000,000
Total Liabilities & Equity $100,000,000 $80,000,000
Answer the following questions:
Current Ratio if Statements Fixed This Error?
Would the Current Ratio Be Better or Worse once this error is corrected?
ROI if Statements Fixed This Error?
Would the ROI be Better or Worse once this error is corrected?
ROE per Company Statements?
ROE if Statements Fixed This Error?
Would the ROE be Better or Worse once this error is corrected?
Display the Better/Worse responses only using one of the following 2 choices: Better Worse
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