P4.2 You are provided with the following information regarding current assets and current liabilities of a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
P4.2 You are provided with the following information regarding current assets and current liabilities of a restaurant operation for two successive years. Current Assets Year 0006 Year 0007 Cash $12,778 $17,765 2,442 2,815 Credit card receivables Accounts receivable 580 420 12,000 16,000 Marketable securities Inventories 6,100 7,100 Prepaid expenses 2.400 2,600 Total Current Assets $36,300 $46,700 Current Liabilities Year 0006 Year 0007 Accounts payable $ 10,410 $12,400 Accrued expenses payable 3,760 6,200 Taxes payable 6,800 8,400 Interest payable 500 800 Current mortgage payable 11.200 9,900 Total Current Liabilities $32,670 $37,700 Calculate the following for Years 0006 and 0007. a. Working capital b. Current ratio c. Quick ratio Sales revenue for Year 0007 is $544,800. The composition of sales rev- enue is cash 36%, credit card sales revenue 61.5%, and accounts receiv- able credit sales revenue of 2.5%. For Year 0007, calculate the following: d. Credit card receivables as a percentage of credit card sales revenue e. Credit card receivables turnover ratio f. Credit card average collection period g. Accounts receivable as a percentage of accounts receivable credit sales revenue h. Accounts receivable turnover ratio i. Accounts receivable average collection period j. Cost of sales was $212,472; calculate cost of sales as a percentage of sales revenue k. Comment on what these ratios tell you about the restaurant. P4.2 You are provided with the following information regarding current assets and current liabilities of a restaurant operation for two successive years. Current Assets Year 0006 Year 0007 Cash $12,778 $17,765 2,442 2,815 Credit card receivables Accounts receivable 580 420 12,000 16,000 Marketable securities Inventories 6,100 7,100 Prepaid expenses 2.400 2,600 Total Current Assets $36,300 $46,700 Current Liabilities Year 0006 Year 0007 Accounts payable $ 10,410 $12,400 Accrued expenses payable 3,760 6,200 Taxes payable 6,800 8,400 Interest payable 500 800 Current mortgage payable 11.200 9,900 Total Current Liabilities $32,670 $37,700 Calculate the following for Years 0006 and 0007. a. Working capital b. Current ratio c. Quick ratio Sales revenue for Year 0007 is $544,800. The composition of sales rev- enue is cash 36%, credit card sales revenue 61.5%, and accounts receiv- able credit sales revenue of 2.5%. For Year 0007, calculate the following: d. Credit card receivables as a percentage of credit card sales revenue e. Credit card receivables turnover ratio f. Credit card average collection period g. Accounts receivable as a percentage of accounts receivable credit sales revenue h. Accounts receivable turnover ratio i. Accounts receivable average collection period j. Cost of sales was $212,472; calculate cost of sales as a percentage of sales revenue k. Comment on what these ratios tell you about the restaurant.
Expert Answer:
Answer rating: 100% (QA)
a Working capital Current assets Current liabilities Year 006 36300 32670 3630 Year 007 46700 37700 ... View the full answer
Related Book For
Accounting Tools for Business Decision Making
ISBN: 978-1118096895
6th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Posted Date:
Students also viewed these accounting questions
-
You are provided with the following information regarding events that occurred at Moore Corporation during 2017 or changes in account balances as of December 31, 2017. Instructions Moore prepares its...
-
You are provided with the following information regarding events that occurred at Moore Corporation during 2019 or changes in account balances as of December 31, 2019. (1) Statement of cash (2) If...
-
You are provided with the following information regarding events that occurred at Moore Corporation during 2020 or changes in account balances as of December 31, 2020. Instructions Moore prepares its...
-
What is the value of a 13% coupon bond that is otherwise identical to the bond described in Part D? Would we now have a discount or a premium bond?
-
The following questions dealing with income measurement are adapted from questions that previously appeared on Certified Management Accountant (CMA) examinations. The CMA designation sponsored by the...
-
For each of the following items, indicate whether or not that item would be considered to be a transaction at Highpoint Lawn Maintenance. a) Highpoint Lawn Maintenance files its articles of...
-
Presented below is the year-end 2016 balance sheet for The Little Corporation. During 2017, the company entered into the following events: 1. Sales to customers totaled \($2\) million, of which...
-
The Ajax Corporation purchased a railroad tank car 8 years ago for $60,000. It is being depreciated by SOYD depreciation , assuming a 10-year depreciable life and a $7000 salvage value . The tank car...
-
If the change in V (AV) is $20 million, the joint value of the two firms is (VAB) is $95 million and one of the two firms is valued at $45 million, what is the value of the other firm? o $20 million...
-
BHELL has to decide whether or not to drill for oil in a new offshore site located in South China Sea, close to the Sarawak border. Previous effort made by BHELL in a nearby area shows that only 40%...
-
The assembly drawing below shows the component parts of a table. If you had to produce 1000 of these tables a day, a) what sub-assembly components would you develop. b) Develop a Pert chart for this...
-
Hardmon Enterprises is currently anall-equity firm with an expected return of 16%. It is considering a leveraged recapitalization in which it would borrow and repurchase existing shares. Assume...
-
Factor the following completely: 2x - 32x*. 4
-
Given what you've learned about interest, how do you feel about saving? What do you see as the benefits of saving? Do you think there are any potential risks to saving?
-
Kari Davis started an accounting and tax preparation business December 1, 2021. She had been operating the business casually on a part-time basis from home for several years. Since demand for her...
-
An investor is interested in constructing a portfolio that consists of both J&J stock and Treasury bond. She puts half of the wealth in J&J that has an expected return of 18% and a standard deviation...
-
A whole striploin weighs 4.600 kg. Trimmings and offcuts are 26%. How many steaks weighing 0.200 kg do you obtain?
-
The Higher the time period of the financial security the higher the. ............... risk. O a. Maturity O b. Default and Maturity Oc. Default O d. Liquidity
-
Lanley Company uses both special journals and a general journal as described in this appendix. On June 30, after all monthly postings had been completed, the Accounts Receivable control account in...
-
The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions (a) Based on the information in...
-
The Moto Hotel opened for business on May 1.2017. Here is its trial balance before adjustment on May 31. Other data: 1. Insurance expires at the rate of $450 per month. 2. A count of supplies shows...
-
The following selected ledger accounts of the Lakewood Manufacturing Company are for May (the fifth month of its accounting year): Required a. Determine the amount of indirect materials requisitioned...
-
Oxford Consulting, Inc., expects the following costs and expenses during the coming year: Required a. Compute a predetermined overhead rate applied on the basis of direct labor hours. b. Prepare a...
-
Dillon Manufacturing had the following inventories at December 31, 2018, the end of its fiscal year: During January 2019, the following transactions occurred; 1. Purchased materials on account,...
Study smarter with the SolutionInn App