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BEAN SUPERSTORE Comparative Balance Sheet December 31, 2017, 2018, and 2019 2019 2018 2017 Assets Cash $346,600 $331,460 $300,000 Accounts Receivable 70,000 65,000 60,000 Enventory 145,830 178,011 155,205 Equipment 100,465 101,202 103,085 Total Assets $662,895 $675,673 $618,290 Liabilities Salaries Payable $90,200 $88,563 $84,209 Accounts Payable 70,000 71,670 69,331 Notes Payable 41,000 50,650 58,250 Equity Common Stock 22,695 21,490 19,100 Retained Earnings 439,000 443,300 387,400 Total Liabilities and Equity $662,895 $675,673 $618,290 LEGUMES PLUS Comparative Balance Sheet December 31, 2017, 2018, and 2019 2019 2018 2017 Assets Cash $407,000 $386,450 $356,367 Accounts Receivable 85,430 82,670 79,230 inventory 128,080 40,036 52,142 Equipment 182,006 23,400 111,701 Total Assets $802,516 $532,556 $599,440

BEAN SUPERSTORE Comparative Balance Sheet December 31, 2017, 2018, and 2019 2019 2018 2017 Assets Cash $346,600 $331,460 $300,000 Accounts Receivable 70,000 65,000 60,000 Enventory 145,830 178,011 155,205 Equipment 100,465 101,202 103,085 Total Assets $662,895 $675,673 $618,290 Liabilities Salaries Payable $90,200 $88,563 $84,209 Accounts Payable 70,000 71,670 69,331 Notes Payable 41,000 50,650 58,250 Equity Common Stock 22,695 21,490 19,100 Retained Earnings 439,000 443,300 387,400 Total Liabilities and Equity $662,895 $675,673 $618,290 LEGUMES PLUS Comparative Balance Sheet December 31, 2017, 2018, and 2019 2019 2018 2017 Assets Cash $407,000 $386,450 $356,367 Accounts Receivable 85,430 82,670 79,230 inventory 128,080 40,036 52,142 Equipment 182,006 23,400 111,701 Total Assets $802,516 $532,556 $599,440

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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### Bean Superstore #### Comparative Balance Sheet **December 31, 2017, 2018, and 2019** **Assets:** - **Cash:** - 2019: $346,600 - 2018: $331,460 - 2017: $300,000 - **Accounts Receivable:** - 2019: 70,000 - 2018: 65,000 - 2017: 60,000 - **Inventory:** - 2019: 145,830 - 2018: 178,011 - 2017: 155,205 - **Equipment:** - 2019: 100,465 - 2018: 101,202 - 2017: 103,085 **Total Assets:** - 2019: $662,895 - 2018: $675,673 - 2017: $618,290 **Liabilities:** - **Salaries Payable:** - 2019: $90,200 - 2018: $88,563 - 2017: $84,209 - **Accounts Payable:** - 2019: 70,000 - 2018: 71,670 - 2017: 69,331 - **Notes Payable:** - 2019: 41,000 - 2018: 50,650 - 2017: 58,250 **Equity:** - **Common Stock:** - 2019: 22,695 - 2018: 21,490 - 2017: 19,100 - **Retained Earnings:** - 2019: 439,000 - 2018: 443,300 - 2017: 387,400 **Total Liabilities and Equity:** - 2019: $662,895 - 2018: $675,673 - 2017: $618,290 --- ### Legumes Plus #### Comparative Balance Sheet **December 31, 2017, 2018, and 2019** **
Transcribed Image Text:### Bean Superstore #### Comparative Balance Sheet **December 31, 2017, 2018, and 2019** **Assets:** - **Cash:** - 2019: $346,600 - 2018: $331,460 - 2017: $300,000 - **Accounts Receivable:** - 2019: 70,000 - 2018: 65,000 - 2017: 60,000 - **Inventory:** - 2019: 145,830 - 2018: 178,011 - 2017: 155,205 - **Equipment:** - 2019: 100,465 - 2018: 101,202 - 2017: 103,085 **Total Assets:** - 2019: $662,895 - 2018: $675,673 - 2017: $618,290 **Liabilities:** - **Salaries Payable:** - 2019: $90,200 - 2018: $88,563 - 2017: $84,209 - **Accounts Payable:** - 2019: 70,000 - 2018: 71,670 - 2017: 69,331 - **Notes Payable:** - 2019: 41,000 - 2018: 50,650 - 2017: 58,250 **Equity:** - **Common Stock:** - 2019: 22,695 - 2018: 21,490 - 2017: 19,100 - **Retained Earnings:** - 2019: 439,000 - 2018: 443,300 - 2017: 387,400 **Total Liabilities and Equity:** - 2019: $662,895 - 2018: $675,673 - 2017: $618,290 --- ### Legumes Plus #### Comparative Balance Sheet **December 31, 2017, 2018, and 2019** **
**LEGUMES PLUS Comparative Income Statement Year Ended December 31, 2017, 2018, and 2019** | | 2019 | 2018 | 2017 | |---------------|-------------|------------|------------| | Net Credit Sales | $1,256,300 | $1,020,570 | $967,478 | | COGS | 500,000 | 580,320 | 465,780 | | Gross Margin | $756,300 | $440,250 | $501,698 | | Expenses | 200,000 | 174,450 | 169,422 | | Net Income (Loss) | $556,300 | $265,800 | $332,276 | **A. Compute the accounts receivable turnover ratios for each company for 2018 and 2019. Round your answers to two decimal places.** | | Bean Superstore | Legume Plus | |---------------|-----------------|-------------| | ART 2018 | x times | times | | ART 2019 | | | **B. Compute the number of days’ sales in receivables ratios for each company for 2018 and 2019. Assume 365 days a year. Round your answers to two decimal places.** | | Bean Superstore | Legume Plus | |---------------|-----------------|-------------| | Days' Sales 2018 | days | days | | Days' Sales 2019 | | | **C. Which company is the better investment and why?** a. Legume could be the better investment because the 2019 turnover rate is close to Bean, but the trend is upward, while Bean is downward. b. If one considers other factors such as net income, Legume shows a big jump in 2019 for net income, and greater cash on hand and receivables than Bean. c. Bean could be considered the better investment because its net income, while lower than Legume’s in 2019, is much less volatile and therefore less risky. d. All of the above statements may be correct. --- This exercise helps in understanding how to analyze financial statements to evaluate investment opportunities, focusing on turnover ratios and the stability of net income over different periods.
Transcribed Image Text:**LEGUMES PLUS Comparative Income Statement Year Ended December 31, 2017, 2018, and 2019** | | 2019 | 2018 | 2017 | |---------------|-------------|------------|------------| | Net Credit Sales | $1,256,300 | $1,020,570 | $967,478 | | COGS | 500,000 | 580,320 | 465,780 | | Gross Margin | $756,300 | $440,250 | $501,698 | | Expenses | 200,000 | 174,450 | 169,422 | | Net Income (Loss) | $556,300 | $265,800 | $332,276 | **A. Compute the accounts receivable turnover ratios for each company for 2018 and 2019. Round your answers to two decimal places.** | | Bean Superstore | Legume Plus | |---------------|-----------------|-------------| | ART 2018 | x times | times | | ART 2019 | | | **B. Compute the number of days’ sales in receivables ratios for each company for 2018 and 2019. Assume 365 days a year. Round your answers to two decimal places.** | | Bean Superstore | Legume Plus | |---------------|-----------------|-------------| | Days' Sales 2018 | days | days | | Days' Sales 2019 | | | **C. Which company is the better investment and why?** a. Legume could be the better investment because the 2019 turnover rate is close to Bean, but the trend is upward, while Bean is downward. b. If one considers other factors such as net income, Legume shows a big jump in 2019 for net income, and greater cash on hand and receivables than Bean. c. Bean could be considered the better investment because its net income, while lower than Legume’s in 2019, is much less volatile and therefore less risky. d. All of the above statements may be correct. --- This exercise helps in understanding how to analyze financial statements to evaluate investment opportunities, focusing on turnover ratios and the stability of net income over different periods.
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