The accounting department of your company has just delivered a draft of the current year's financial statements to you. The summary is as follows:
|Beginning of the Year||End of the Year|
|Net Income for the Year||81,000|
|Common Shares Outstanding||21,000||21,000|
You discovered that they have not adjusted for estimated bad debt expenses of $7,600. For each of the following ratios, calculate:
1. The ratio that would have resulted had the error not been discovered (i.e. the incorrect ratio).
2. The correct ratio.