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The following accounting information exists for the Aspen and Willow companies: Aspen Willow Cash $ 17,000 $ 27,000 Wages payable 20,500 20,000 Merchandise inventory 25,035
The following accounting information exists for the Aspen and Willow companies:
Aspen | Willow | |||||
Cash | $ | 17,000 | $ | 27,000 | ||
Wages payable | 20,500 | 20,000 | ||||
Merchandise inventory | 25,035 | 59,600 | ||||
Building | 40,000 | 90,000 | ||||
Accounts receivable | 32,650 | 38,150 | ||||
Long-term notes payable | 90,000 | 120,000 | ||||
Land | 45,000 | 50,000 | ||||
Accounts payable | 44,000 | 54,500 | ||||
Sales revenue | 230,000 | 270,000 | ||||
Expenses | 195,000 | 250,000 | ||||
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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