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The following accounting information exists for Aspen and Willow companies: Aspen Willow Cash $ 14,000 $ 24,000 Wages payable 19,000 25,500 Merchandise inventory 21,590 57,800
The following accounting information exists for Aspen and Willow companies:
Aspen | Willow | |||||
Cash | $ | 14,000 | $ | 24,000 | ||
Wages payable | 19,000 | 25,500 | ||||
Merchandise inventory | 21,590 | 57,800 | ||||
Building | 30,000 | 100,000 | ||||
Accounts receivable | 36,095 | 37,050 | ||||
Long-term notes payable | 80,000 | 110,000 | ||||
Land | 45,000 | 60,000 | ||||
Accounts payable | 39,000 | 42,500 | ||||
Sales revenue | 230,000 | 310,000 | ||||
Expenses | 190,000 | 240,000 | ||||
Required a-1. Determine the amount of current assets and current liabilities for each company. a-2. Compute the current ratio for each company. b. Assuming that all assets and liabilities are listed above, compute the debt-to-assets ratios for each company. c-1. Determine which company has the greater financial risk in the short term. c-2. Determine which company has the greater financial risk in the long term.
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