The following accounting information pertains to Adams and Hood companies at the end of 2010.

Required
a. Organize the class into two sections and divide each section into groups of three to five students. Assign each of the sections one of the companies.
Group Tasks
(1) Identify the current assets and current liabilities, and compute the current ratio for the
particular company assigned to the group.
(2) Assuming that all assets and liabilities are listed here, compute the debt to assets ratio
for the particular company assigned to the group.
Class Discussion
b. Have a representative from each section report the current ratio and debt to assets ratio
for their respective companies.
c. Solicit comments regarding which company has the greater financial risk in both the short and longterm.

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Account Title Adams Hood $ 12000 $ 15,000 12,000 55,000 80,000 Cash Wages payable Merchandise inventory Building Accounts receivable Long-term notes payable Land Accounts payable Sales revenue Expenses 10,000 20,000 90,000 22,000 80,000 100000 35,000 25,000 220,000 190,000 40,000 35,000 250,000 230,000