Compute net income for the first year for Tri Fecta

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Question 1 - Tri Fecta, a partnership, had revenues of $200,000 in its first year of operations. The partnership has not collected on $20,000 of its sales and still owes $25,000 on $70,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $25,000 in salaries. The partners invested $40,000 in the business and $20,000 was borrowed on a five-year note. The partnership paid $2,000 in interest that was the amount owed for the year and paid $8,000 for a two-year insurance policy on the first day of business. Tri Fecta has an effective income tax rate of 40%.

Required - Compute net income for the first year for Tri Fecta.

Question 2 - Spartan Sportswear's current assets consist of cash, marketable securities, accounts receivable, and inventories. The following data were abstracted from a recent financial statement:

Inventories $220,000

Total assets $740,000

Current ratio 2.75

Acid-test ratio 1.5

Debt to equity ratio 1.4

Required - Compute the following for Spartan:

a. Current assets

b. Shareholders' equity

c. Long-term assets

d. Long-term liabilities

Reference no: EM132868568

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