10. Review the select information for Bean Superstore and Legumes Plus (industry competitors), and then complete the following. A. Compute the accounts receivable turnover ratios for each company for 2018 and 2019. B. Compute the number of days' sales in receivables ratios for each company for 2018 and 2019. C. Determine which company is the better investment and why. Round answers to two decimal places. BEAN SUPERSTORE LEGUMES PLUS Comparative Balance Sheet December 31, 2017, 2018, and 2019 Comparative Balance Sheet December 31, 2017, 2018, and 2019 2019 2018 2017 2019 2018 2017 Assets Cash Accounts Receivable Inventory Equipment $345,600 67,000 145,830 100,465 $330,460 62,000 178,011 101,202 $300,000 59,000 155,205 103,085 $407,000 85,430 128,080 182,006 $386,450 82,670 40,036 23,400 $356,367 79,230 52,142 111,701 Total Assets $658,895 $671,673 $617,290 $802,516 $532,556 $599,440 Liabilities Salaries Payable Accounts Payable Notes Payable $ 90,200 70,000 41,000 $ 88,563 71,670 50,650 $ 84,209 69,331 58,250 $ 95,100 62,430 63,222 $ 91,455 86,331 67,880 $ 89,467 87,197 68,312 Equity Common Stock Retained Earnings Total Liabilities and Equity $ 20,990 439,800 $ 22,090 264,800 $ 22,695 $ 19,100 386,400 $ 25,464 $ 22,188 332,276 435,000 556,300 $658,895 $671,673 $617,290 $802,516 $532,556 $599,440 BEAN SUPERSTORE LEGUMES PLUS Comparative Income Statement Year Ended December 31, 2017, 2018, and 2019 Comparative Income Statement Year Ended December 31, 2017, 2018, and 2019 2019 2018 2017 2019 2018 2017 Net Credit Sales $1,000,000 $984,400 $875,350 $1,256,300 $1,020,570 $967,478 Cost of Goods Sold 450,000 419,600 388,950 500,000 580,320 465,780 Gross Margin 550,000 564,800 486,400 756,300 440,250 501,698 125,000 175,450 169,422 Expenses Net Income (Loss) 115,000 100,000 200,000 435,000 439,800 386,400 556,300 264,800 332,276
10. Review the select information for Bean Superstore and Legumes Plus (industry competitors), and then complete the following. A. Compute the accounts receivable turnover ratios for each company for 2018 and 2019. B. Compute the number of days' sales in receivables ratios for each company for 2018 and 2019. C. Determine which company is the better investment and why. Round answers to two decimal places. BEAN SUPERSTORE LEGUMES PLUS Comparative Balance Sheet December 31, 2017, 2018, and 2019 Comparative Balance Sheet December 31, 2017, 2018, and 2019 2019 2018 2017 2019 2018 2017 Assets Cash Accounts Receivable Inventory Equipment $345,600 67,000 145,830 100,465 $330,460 62,000 178,011 101,202 $300,000 59,000 155,205 103,085 $407,000 85,430 128,080 182,006 $386,450 82,670 40,036 23,400 $356,367 79,230 52,142 111,701 Total Assets $658,895 $671,673 $617,290 $802,516 $532,556 $599,440 Liabilities Salaries Payable Accounts Payable Notes Payable $ 90,200 70,000 41,000 $ 88,563 71,670 50,650 $ 84,209 69,331 58,250 $ 95,100 62,430 63,222 $ 91,455 86,331 67,880 $ 89,467 87,197 68,312 Equity Common Stock Retained Earnings Total Liabilities and Equity $ 20,990 439,800 $ 22,090 264,800 $ 22,695 $ 19,100 386,400 $ 25,464 $ 22,188 332,276 435,000 556,300 $658,895 $671,673 $617,290 $802,516 $532,556 $599,440 BEAN SUPERSTORE LEGUMES PLUS Comparative Income Statement Year Ended December 31, 2017, 2018, and 2019 Comparative Income Statement Year Ended December 31, 2017, 2018, and 2019 2019 2018 2017 2019 2018 2017 Net Credit Sales $1,000,000 $984,400 $875,350 $1,256,300 $1,020,570 $967,478 Cost of Goods Sold 450,000 419,600 388,950 500,000 580,320 465,780 Gross Margin 550,000 564,800 486,400 756,300 440,250 501,698 125,000 175,450 169,422 Expenses Net Income (Loss) 115,000 100,000 200,000 435,000 439,800 386,400 556,300 264,800 332,276
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:10. Review the select information for Bean Superstore and
Legumes Plus (industry competitors), and then complete the
following.
A. Compute the accounts receivable turnover ratios for each
company
for 2018 and 2019.
B. Compute the number of days' sales in receivables ratios for
each company for 2018 and 2019.
C. Determine which company is the better investment and why.
Round answers to two decimal places.
BEAN SUPERSTORE
LEGUMES PLUS
Comparative Balance Sheet
December 31, 2017, 2018, and 2019
Comparative Balance Sheet
December 31, 2017, 2018, and 2019
2019
2018
2017
2019
2018
2017
Assets
Cash
$345,600
67,000
145,830
100,465
$330,460
62,000
178,011
101,202
$300,000
59,000
155,205
103,085
$407,000
85,430
128,080
182,006
$386,450
82,670
40,036
23,400
$356,367
79,230
52,142
111,701
Accounts Receivable
Inventory
Equipment
Total Assets
$658,895
$671,673
$617,290
$802,516
$532,556
$599,440
Liabilities
Salaries Payable
Accounts Payable
Notes Payable
$ 91,455
$ 90,200
70,000
41,000
$ 88,563
71,670
50,650
$ 84,209
69,331
58,250
$95,100
62,430
63,222
86,331
67,880
$ 89,467
87,197
68,312
Equity
Common Stock
Retained Earnings
$ 22,695
435,000
$ 19,100
386,400
$ 22,090
$ 20,990
439,800
$ 25,464
556,300
$ 22,188
332,276
264,800
Total Liabilities and Equity
$658,895
$671,673
$617,290
$802,516
$532,556
$599,440
BEAN SUPERSTORE
LEGUMES PLUS
Comparative Income Statement
Year Ended December 31, 2017, 2018, and 2019
Comparative Income Statement
Year Ended December 31, 2017, 2018, and 2019
2019
2018
2017
2019
2018
2017
Net Credit Sales
$1,000,000
$984,400
$875,350
$1,256,300
$1,020,570
$967,478
Cost of Goods Sold
450,000
419,600
388,950
500,000
580,320
465,780
Gross Margin
Expenses
Net Income (Loss)
550,000
564,800
486,400
756,300
440,250
501,698
115,000
125,000
100,000
200,000
175,450
169,422
435,000
439,800
386,400
556,300
264,800
332,276
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