The following information applies to the questions displayed below.] Summary information from the financial statements of two companies competing in the same industry follows. BarcoCompanyKyanCompany BarcoCompanyKyanCompanyData from the current year-end balance sheets Data from the current year’s income statementAssets Sales$770,000 $914,200 Cash$21,000 $34,000 Cost of goods sold 587,100 642,500 Accounts receivable, net 34,400 59,400 Interest expense 9,100 17,000 Merchandise inventory 84,940 132,500 Income tax expense 14,800 25,238 Prepaid expenses 5,400 7,350 Net income 159,000 229,462 Plant assets, net 310,000 307,400 Basic earnings per share 3.79 5.08 Total assets$455,740 $540,650 Cash dividends per share 3.82 4.01 Liabilities and Equity Beginning-of-year balance sheet data Current liabilities$70,340 $102,300 Accounts receivable, net$28,800 $56,200 Long-term notes payable 82,800 107,000 Merchandise inventory 63,600 115,400 Common stock, $5 par value 210,000 226,000 Total assets 388,000 382,500 Retained earnings 92,600 105,350 Common stock, $5 par value 210,000 226,000 Total liabilities and equity$455,740 $540,650 Retained earnings 94,040 57,140 rev: 11_27_2019_QC_CS-192168 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 (f) days’ sales uncollected. (Do not round intermediate calculations.)1b. Identify the company you consider to be the better short-term credit risk. Required information[The following information applies to the questions displayed below.]Summary information from the financial statements of two companies competing in the same industry follows.КyanCompany CompanyBarcoBarcoКyanCompany CompanyData from the current year-end balance sheetsData from the current year's income statementAssetsSales$770,000 $914, 200587,100$ 21,000 $ 34,00034,40084,9405,400Cash642,500Accounts receivable, netMerchandise inventoryPrepaid expensesPlant assets, net59,400132,5007,350307,400Cost of goods soldInterest expenseIncome tax expenseNet income9,10014,800159,00017,00025 238229,462310,000Basic earnings per share3.795.08Total assets$455,740 $540,650Cash dividends per share3.824.01|Liabilities and EquityCurrent liabilitiesBeginning-of-year balance sheet dataAccounts receivable, netMerchandise inventoryTotal assets$ 70,340 $102,300$ 28,800 $ 56/200Long-term notes payableCommon stock, $5 par valueRetained earnings82,800210,00092,600107,000226,000105, 35063,600388,000115,400382 500Common stock, $5 par value210,000226,000Total liabilities and equity$455,740 $540,650Retained earnings94,04057,140Required: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 (f days' sales uncollected. (Do not round intermediate calculations.)1b. Identify the company you consider to be the better short-term credit risk.Complete this question by entering your answers in the tabs below.1A CurrentRatio1A Acct Rec1A Acid TestRatio1A Invent1A Days Sal in 1A Days SalUncol1B short termTurnTurnoverInvFor both companies compute the current ratio.(a)Current RatioCompany Choose Numerator:I Choose Denominator:Current Ratio= Current ratioBarcoto 1|Кyanto 1< 1A Current Ratio1A Acid Test Ratio >

Ratios are very helpful in taking Decision of investment of any company and also it provides the…

Answered: Required: 1a. For both companies…

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter17: Financial Statement Analysis

Section17.4: Analyzing Financial Statements Using Financial Ratios

Problem 1WT

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Question

The following information applies to the questions displayed below.]

Summary information from the financial statements of two companies competing in the same industry follows.

	Barco Company	Kyan Company		Barco Company	Kyan Company
Data from the current year-end balance sheets		Data from the current year’s income statement
Assets						Sales	$	770,000	$	914,200
Cash	$	21,000	$	34,000		Cost of goods sold		587,100		642,500
Accounts receivable, net		34,400		59,400		Interest expense		9,100		17,000
Merchandise inventory		84,940		132,500		Income tax expense		14,800		25,238
Prepaid expenses		5,400		7,350		Net income		159,000		229,462
Plant assets, net		310,000		307,400		Basic earnings per share		3.79		5.08
Total assets	$	455,740	$	540,650		Cash dividends per share		3.82		4.01

Liabilities and Equity						Beginning-of-year balance sheet data
Current liabilities	$	70,340	$	102,300		Accounts receivable, net	$	28,800	$	56,200
Long-term notes payable		82,800		107,000		Merchandise inventory		63,600		115,400
Common stock, $5 par value		210,000		226,000		Total assets		388,000		382,500
Retained earnings		92,600		105,350		Common stock, $5 par value		210,000		226,000
Total liabilities and equity	$	455,740	$	540,650		Retained earnings		94,040		57,140

rev: 11_27_2019_QC_CS-192168

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 (f) days’ sales uncollected. (Do not round intermediate calculations.)
1b. Identify the company you consider to be the better short-term credit risk.

Required information
[The following information applies to the questions displayed below.]
Summary information from the financial statements of two companies competing in the same industry follows.
Кyan
Company Company
Barco
Barco
Кyan
Company Company
Data from the current year-end balance sheets
Data from the current year's income statement
Assets
Sales
$770,000 $914, 200
587,100
$ 21,000 $ 34,000
34,400
84,940
5,400
Cash
642,500
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
59,400
132,500
7,350
307,400
Cost of goods sold
Interest expense
Income tax expense
Net income
9,100
14,800
159,000
17,000
25 238
229,462
310,000
Basic earnings per share
3.79
5.08
Total assets
$455,740 $540,650
Cash dividends per share
3.82
4.01
|
Liabilities and Equity
Current liabilities
Beginning-of-year balance sheet data
Accounts receivable, net
Merchandise inventory
Total assets
$ 70,340 $102,300
$ 28,800 $ 56/200
Long-term notes payable
Common stock, $5 par value
Retained earnings
82,800
210,000
92,600
107,000
226,000
105, 350
63,600
388,000
115,400
382 500
Common stock, $5 par value
210,000
226,000
Total liabilities and equity
$455,740 $540,650
Retained earnings
94,040
57,140
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 (f days' sales uncollected. (Do not round intermediate calculations.)
1b. Identify the company you consider to be the better short-term credit risk.
Complete this question by entering your answers in the tabs below.
1A Current
Ratio
1A Acct Rec
1A Acid Test
Ratio
1A Invent
1A Days Sal in 1A Days Sal
Uncol
1B short term
Turn
Turnover
Inv
For both companies compute the current ratio.
(a)
Current Ratio
Company Choose Numerator:
I Choose Denominator:
Current Ratio
= Current ratio
Barco
to 1
|Кyan
to 1
< 1A Current Ratio
1A Acid Test Ratio >

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