Question
The following accounting information exists for the Aspen and Willow companies: Aspen Willow Cash $ 12,000 $ 22,000 Wages payable 20,000 22,500 Merchandise inventory 29,805
The following accounting information exists for the Aspen and Willow companies:
Aspen | Willow | |||||
Cash | $ | 12,000 | $ | 22,000 | ||
Wages payable | 20,000 | 22,500 | ||||
Merchandise inventory | 29,805 | 58,400 | ||||
Building | 40,000 | 90,000 | ||||
Accounts receivable | 38,480 | 31,000 | ||||
Long-term notes payable | 90,000 | 100,000 | ||||
Land | 50,000 | 60,000 | ||||
Accounts payable | 38,000 | 45,500 | ||||
Sales revenue | 240,000 | 290,000 | ||||
Expenses | 190,000 | 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.
Determine the amount of current assets and current liabilities for each company.
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Compute the current ratio for each company. (Round your answers to 2 decimal places.)
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Assuming that all assets and liabilities are listed above, compute the debt-to-assets ratios for each company. (Round your answers to 1 decimal place.)
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Determine which company has the greater financial risk in the short term.
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Determine which company has the greater financial risk in the long term.
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