Need help with question 2 dealing with ratios and 3Metro State – ACC 210FALL 2016STUDENT NAME:ACCOUNTING CASE 3 – SELF-EMPLOYED: Metro Accounting LLC Peter Ramirez asked for a loan of $40,000 to grow the business. The US Bank loan officer requested the financial statements as of April 30, 2014The loan officer wants to see the Balance Sheet, Income Statement , the Statement of Cash Flow, and the basic financial ratios Requirements:1) Use the financial statements attached and prepare the Statement of Cash Flows for the period March 1 – April 30 2014. Use the guidelines learned in Chapter 12 of yourtextbook. YOU CAN DEVELOP YOUR CASH FLOW STATEMENT IN THE OPEN TAB OF THE TEMPLATE OR OTHER MEAN.2) Calculate the following financial ratios as of April 30, 2014 ( use the guidelines learned in Chapter 13 of your textbook): Acid Test Ratio, Current Ratio, Current Ratio,Debt Ratio, Profit Margin, and Return on Common Stockholder’s Equity.3) Brief comments on the following: based on your financial analysis do you think the Bank would give Peter the loan? Respond Yes or NO and your reasoning about that. Statement of Cash FlowsFor Period March 1, 2014 – April 30, 2014Cash flows from Operating ActivitiesNetIncome to reconcile net income to net cash provided byAdjustmentsoperating activitiesIncrease in accounts recievableIncrease in pre-paid expensesIncrease in accounts payableNet cash provided by operating activitiesCash flows from investing activitiesCash received from sale of plant assetsCash paid for purchase of campany assetsNet cash provided by investing activitiesCash flows from financing activitiesCash received from issuing stockCash paid for owner’s distributionsNet cash used in financing activitiesNet increase in cashCash balance at prior month-endCash balance at current year-end $ 7,435 $ (3,500)$(450)$ (26,895)$ (23,410)$$ (31,130)$ (31,130)$ 18,000$ (1,450)$ 16,550$ (37,990)$$ (37,990) STUDENT NAME:Metro Accounting LLCIncome StatementFor the Period: March 1 – April 30, 2014AmountRevenuesAccounting Services Fees $10,650 Total RevenuesExpensesLegal and Professional FeesLicenses and PermitsRentAdvetising ExpenseMeals & EntertainmentWages & Salaries Total ExpensesNet Income Total 10,650.00 700500450500651,000 3,215$ 7,435.00 STUDENT NAME:Metro Accounting LLCBalance SheetMarch 31 2014Assets CashMachinery & Equip-ComputersMachinery & Equip-Cell PhonesFurniture & FixturesPrepaid RentAccounts ReceivableVehicle Total Assets Liabilities$19,300$900$850$880$4503,50025,000 $50,880 Credit Card PayableNotes Payable Toyota Corp $2,895$24,000 Total Liabilities 26,895 EquityOwner’s contributionOwner’s distributionsNet IncomeTotal EquityTotal Liabilities and Equity $ 18,000(1,450)7,43523,98550,880 Acid Test Ratio, Current Ratio, Current Ratio, Debt Ratio, Profit Margin, and Return on Common Stockholder’s Equity.Debt Ratio= Total liabilities / total assetsProfit margin = net income / net sales ockholder’s Equity.
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