Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Fourth Attempt - Please show step-by-step calculations and what line items are used for the following ratio calculation so it is easy to understand what

Fourth Attempt - Please show step-by-step calculations and what line items are used for the following ratio calculation so it is easy to understand what numbers have been used:

Note:Accounts Receivable Numbers used in 2nd and 3rd attempt that don't work are: Barco $37,400 and Kyan $57,400; 3rd attempt - $33600 - Barco and Kyan - $55,800. I have the remaining numbers that are correct.

Summary information from the financial statements of two companies competing in the same industry follows. Barco Company Kyan Company Barco Company Kyan Company Data from the current year-end balance sheets Data from the current years income statement Assets Sales $ 770,000 $ 880,200 Cash $ 19,500 $ 34,000 Cost of goods sold 585,100 632,500 Accounts receivable, net 37,400 57,400 Interest expense 7,900 13,000 Current notes receivable (trade) 9,100 7,200 Income tax expense 14,800 24,300 Merchandise inventory 84,440 132,500 Net income 162,200 210,400 Prepaid expenses 5,000 6,950 Basic earnings per share 4.51 5.11 Plant assets, net 290,000 304,400 Cash dividends per share 3.81 3.93 Total assets $ 445,440 $ 542,450 Beginning-of-year balance sheet data Liabilities and Equity Accounts receivable, net $ 29,800 $ 54,200 Current liabilities $ 61,340 $ 93,300 Current notes receivable (trade) 0 0 Long-term notes payable 80,800 101,000 Merchandise inventory 55,600 107,400 Common stock, $5 par value 180,000 206,000 Total assets 398,000 382,500 Retained earnings 123,300 142,150 Common stock, $5 par value 180,000 206,000 Total liabilities and equity $ 445,440 $ 542,450 Retained earnings 98,300 93,600 ________________________________________ Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) receivable turnover, (d) inventory turnover, (e) days' sales in inventory, and (f) days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be the better short-term credit risk. For both companies compute the days' sales uncollected. (f) Days Sales Uncollected Company Choose Numerator: / Choose Denominator: X Days = Days Sales Uncollected Current receivables, net / Net Sales X 365 = days Barco / $ 770,000 X 365 = days Kyan / $ 880,200 X 365 = days

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Students also viewed these Accounting questions