Question
The following accounting information exists for the Aspen and Willow companies: Aspen Willow Cash $ 30,000 $ 20,000 Wages payable 30,000 25,000 Merchandise inventory 65,000
The following accounting information exists for the Aspen and Willow companies: Aspen Willow Cash $ 30,000 $ 20,000 Wages payable 30,000 25,000 Merchandise inventory 65,000 35,000 Building 95,000 95,000 Accounts receivable 35,000 40,000 Long-term notes payable 145,000 110,000 Land 60,000 55,000 Accounts payable 55,000 50,000 Sales revenue 325,000 265,000 Expenses 295,000 230,000 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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