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The following accounting information exists for Aspen and Willow companies. Aspen Willow Cash $ 12,000 $ 22,000 Wages payable 22,000 24,000 Merchandise inventory 24,240 53,000
The following accounting information exists for Aspen and Willow companies.
Aspen | Willow | |
---|---|---|
Cash | $ 12,000 | $ 22,000 |
Wages payable | 22,000 | 24,000 |
Merchandise inventory | 24,240 | 53,000 |
Building | 60,000 | 110,000 |
Accounts receivable | 38,480 | 34,300 |
Long-term notes payable | 85,000 | 130,000 |
Land | 45,000 | 60,000 |
Accounts payable | 36,000 | 44,000 |
Sales revenue | 220,000 | 270,000 |
Expenses | 195,000 | 245,000 |
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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