Summary information from the financial statements of two companies competing in the same industry follows. Kyan...
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Summary information from the financial statements of two companies competing in the same industry follows. Kyan Company Barco Company Data from the current year-end balance sheets Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Barco Company $ 33,000 60,400 140,500 7,450 309,400 $438,140 $ 550,750 $ 21,500 36,400 84,940 5,300 290,000 $ 69,340 85,800 180,000 103,000 $ 97,300 103,000 236,000 114,450 Total liabilities and equity $ 438,140 $ 550,750 Data from the current year's income statement Sales Cost of goods sold Interest expense Income tax expense Net income. Basic earnings per share Cash dividends per share. Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 800,000 $879,200 589,100 634,500 12,000 24,272 208,428 4.42 3.96 8,300 15,377 187,223 5.20 3.80 $ 30,800 65,600 Kyan Company 378,000 180,000 52,577 $ 51,200 111,400 382,500 236,000 92,934 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (d) inventory turnover, (e) days' sales in inventory, and (0) days' sales uncollected. Note: Do not round intermediate calculations. 1b. Identify the company you consider to be the better short-term credit risk. Summary information from the financial statements of two companies competing in the same industry follows. Kyan Company Barco Company Data from the current year-end balance sheets Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Barco Company $ 33,000 60,400 140,500 7,450 309,400 $438,140 $ 550,750 $ 21,500 36,400 84,940 5,300 290,000 $ 69,340 85,800 180,000 103,000 $ 97,300 103,000 236,000 114,450 Total liabilities and equity $ 438,140 $ 550,750 Data from the current year's income statement Sales Cost of goods sold Interest expense Income tax expense Net income. Basic earnings per share Cash dividends per share. Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 800,000 $879,200 589,100 634,500 12,000 24,272 208,428 4.42 3.96 8,300 15,377 187,223 5.20 3.80 $ 30,800 65,600 Kyan Company 378,000 180,000 52,577 $ 51,200 111,400 382,500 236,000 92,934 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (d) inventory turnover, (e) days' sales in inventory, and (0) days' sales uncollected. Note: Do not round intermediate calculations. 1b. Identify the company you consider to be the better short-term credit risk.
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Related Book For
Fundamental Accounting Principles
ISBN: 978-0077862275
22nd edition
Authors: John Wild, Ken Shaw, Barbara Chiappetta
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