Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 $ 926,200
Cash $ 22,000 $ 34,000 Cost of goods sold 590,100 636,500
Accounts receivable, net 39,400 51,400 Interest expense 7,500 15,000
Merchandise inventory 84,440 136,500 Income tax expense 14,800 25,570
Prepaid expenses 5,700 7,150 Net income 157,600 249,130
Plant assets, net 330,000 305,400 Basic earnings per share 3.75 5.28
Total assets $ 481,540 $ 534,450 Cash dividends per share 3.76 3.92
Liabilities and Equity Beginning-of-year balance sheet data
Current liabilities $ 67,340 $ 103,300 Accounts receivable, net $ 28,800 $ 56,200
Long-term notes payable 82,800 113,000 Merchandise inventory 59,600 107,400
Common stock, $5 par value 210,000 236,000 Total assets 428,000 392,500
Retained earnings 121,400 82,150 Common stock, $5 par value 210,000 236,000
Total liabilities and equity $ 481,540 $ 534,450 Retained earnings 121,720 18,044

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.

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

Fundamentals Of Public Budgeting And Finance

Authors: Aman Khan

1st Edition

3030192253, 978-3030192259

Students also viewed these Accounting questions