Mini case 1 Bob Evans Farms, Inc.}
Bob Evans Farms, Inc., operates 354 restaurants and several food processing plants. The plants primarily process pork into sausage, some of which is used in the restaurants and some is sold to grocery stores. The food processing plants also produce "fast-food"-type frozen sandwiches, which are marketed to grocery stores.
The 1995 balance sheet of Bob Evans Farms showed a cash balance of \(\$ 10\) million and trade accounts receivable of \(\$ 16\) million. The notes to the financial statements revealed that there was a line of credit available of \(\$ 63\) million, of which \(\$ 26\) million was then outstanding.
\section*{Instructions}

(a) Explain why most of the trade accounts receivable would probably not pertain to the restaurant business.

(b) What kind of individuals or companies would you expect to find in the individual accounts receivable accounts?

(c) Why might Bob Evans Farms be keeping the \(\$ 10\) million in cash instead of using most of it-for example, \(\$ 8\) million--to help pay off the line of credit debt?