The December 31, Year 4, the balance sheet for Sussex Corporation is presented here. These are the only accounts on Sussex balance sheet. Amounts indicated by question marks (?) can be calculated using the following additional information:

Required (Show your work on all problems.)

a. Compute the balance in trade accounts payable as of December 31, Year 4.

b. Compute the balance in retained earnings as of December 31, Year 4.

c. Compute the balance in the inventory account as of December 31, Year 4.

(Assume that the level of inventory did not change from last year.)

2-A low price to earnings ratio (P/E ratio) may suggest that:

A. a companys stock overvalued.

B. a companys future earnings are expected to decline.

C. a companys future earnings are expected to increase.

D. the price of a companys stock is equal to its book value.

Using 3 sentences, describe why you selected the answer that you chose

SUSSEX CORPORATION Balance Sheet As of December 31, Year 4 Assets Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) 298,000 $ 31,000 $442,000 Liabilities and Stockholders' Equity Accounts payable (trade) Income taxes payable (current) Long-term debt Common stock Retained earnings 31,000 304,000 Additional Information Current ratio (at year end) Total liabilities Total stockholders' equity Gross margin percent Inventory turnover (Cost of goods soldEnding inventory) Gross margin for Year 4 1.8 to 1.0 70% 40% 11.6 times $ 319,000