Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can anyone solve this accounting question? 1 Part 1 of 2 Required information [ The following information applies to the questions displayed below. ] Summary

Can anyone solve this accounting question?1
Part 1 of 2
Required information
[The following information applies to the questions displayed below.]
Summary information from the financial statements of two companies competing in the same industry follows.
\table[[,\table[[Barco],[Company]],\table[[Kyan],[Company]]],[\table[[Data from the current year-end],[balance sheets]]],[Assets],[Cash,$22,000,$35,000],[Accounts receivable, net,34,400,59,400],[Merchandise inventory,84,640,138,500],[Prepaid expenses,5,600,7,650],[Plant assets, net,340,000,304,400],[Total assets,$486,640,$544,950],[Liabilities and Equity],[Current liabilities,$66,340,$91,300],[Long-term notes payable,82,800,101,000],[Common stock, $5 par value,190,000,236,000],[Retained earnings,147,500,116,650],[Total liabilities and equity,$486,640,$544,950]]
\table[[Data from the current year's income,\table[[Barco],[Company]],Kyan Company],[statement,,],[Sales,5770,000,$901,200],[Cost of goods sold,887,100,648,500],[Interest expense,14,800,17,000],[Income tax expense,159,200,24,879],[Net income,4.19,210,821],[Basic earnings per share,3.76,4.47],[Cash dividends per share,,3.97],[Beginning-of-year balance sheet data,$25,800,$58,200],[Accounts receivable, net,57,600,111,400],[Merchandise inventory,190,000,392,500],[Total assets,131,180,236,000],[Common stock, $5 par value,,93,213],[Retained earnings,,]]
Required:
1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (d) inventory turnover, (e) days' sales in inventory, and (f) days' sales uncollected.
Note: Do not round intermediate calculations.
1b. Identify the company you consider to be the better short-term credit risk.
Complete this question by entering your answers in the tabs below.
\table[[\table[[1A Current],[Ratio]],\table[[1A Acid Test],[Ratio]],\table[[1A Acct Rec],[Turn]],\table[[1 A Invent],[Turnover]],\table[[1A Days Sal in],[Inv]],\table[[1A Days Sal],[Uncol]],1B short term]]
\table[[(a),Current Ratio],[Company,Numerator:,1,Denominator:,=,Current Ratio],[,,1,,=,Current ratio],[Barco,,1,,=,to 1],[Kyan,,1,,=,to 1]]
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And GRC Automation In SAP

Authors: Maxim Chuprunov

1st Edition

3642353010, 9783642353017

More Books

Students also viewed these Accounting questions