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Kahluha Manufacturers Inc
Kahluha Manufacturers Inc. reported the following information in its financial statements (10marks)
KAHLUHA MANFACTURERS INC.
Statement of Financial Position
June 30
Assets ......................... 2023 2022
Cash ......................... $32,000 $29,000
Accounts receivable ......................... 7,500 5,500
Prepaid Insurance ......................... 1,100 1,450
Inventory ......................... 220,000 175,000
Building ......................... 145,000 155,000
Equipment ......................... 36,000 40,000
Total Assets ......................... $441,600 $405,950
Liabilities and shareholders' equity
Accounts Payable ......................... $ 12,500 $14,500
Notes Payable ......................... 10,000 0
Bonds Payable ......................... 145,000 95,000
Long-Term Debt ......................... 116,000 175,000
Common shares ......................... 25,000 25,000
Retained earnings ......................... 133,100 96,450
Total liabilities and shareholders' equity ......................... $441,600 $405,950
Revenue ......................... $450,000 $300,000
Operating expenses ......................... 300,000 210,000
Income from operations ......................... 150,000 90,000
Interest expense ......................... 6,000 9,000
Income tax expense ......................... 36,000 20,250
Net income ......................... $108,000 $60,750
Instructions
(a) Calculate the company's debt to total assets and times interest earned ratios for each year.(8 marks)
(b) Determine if the change from 2022- 2023 is an improvement or deterioration. (2 marks)
Expert Solution
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