Homework Help is Here – Start Your Trial Now!
Business
Accounting
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. Kyan 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 Total liabilities and equity Barco Company $ 19,000 $ 30,000 34,400 52,400 84,740 138,500 5,400 7,850 330,000 307,400 $ 473,540 $ 536,150 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 $ 62,340 $ 97,300 85,800 111,000 210,000 216,000 115,400 111,850 $473,540 $ 536,150 Retained earnings Total assets Connon stock, $5 par value Barco Company $ 780,000 584, 100 8,300 14,992 172,608 4.11 3.73 $ 28,800 63,600 428,000 210,000 99,452 Kyan Company $ 887,200 642,500 10,000 24,493 210,207 4.87 4.02 $ 58,200 109,400 362,500 216,000 75,307 Required: a. 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 (4 days' sales uncollected. (Do not round Intermediate calculations.) Ib. 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. Kyan 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 Total liabilities and equity Barco Company $ 19,000 $ 30,000 34,400 52,400 84,740 138,500 5,400 7,850 330,000 307,400 $ 473,540 $ 536,150 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 $ 62,340 $ 97,300 85,800 111,000 210,000 216,000 115,400 111,850 $473,540 $ 536,150 Retained earnings Total assets Connon stock, $5 par value Barco Company $ 780,000 584, 100 8,300 14,992 172,608 4.11 3.73 $ 28,800 63,600 428,000 210,000 99,452 Kyan Company $ 887,200 642,500 10,000 24,493 210,207 4.87 4.02 $ 58,200 109,400 362,500 216,000 75,307 Required: a. 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 (4 days' sales uncollected. (Do not round Intermediate calculations.) Ib. Identify the company you consider to be the better short-term credit risk.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Kk172.

 

! 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. 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 $ 19,000 34,400 84,740 5,400 $ 30,000 52,400 138,500 7,850 330,000 307,400 $ 473,540 $ 536,150 $62,340 $ 97,300 111,000 85,800 210,000 115,400 Total liabilities and equity $ 473,540 $ 536,150 216,000 111,850 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 $ 780,000 584, 100 8,300 14,992 172,608 4.11 3.73 $ 28,800 63,600 428,000 210,000. 99,452 Kyan Company $887,200 642,500 10,000 24,493 210,207 4.87 4.02 $ 58,200 109,400 362,500 216,000 75,307 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 (4 days' sales uncollected. (Do not round Intermediate calculations.) 1b. Identify the company you consider to be the better short-term credit risk.
Transcribed Image Text:! 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. 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 $ 19,000 34,400 84,740 5,400 $ 30,000 52,400 138,500 7,850 330,000 307,400 $ 473,540 $ 536,150 $62,340 $ 97,300 111,000 85,800 210,000 115,400 Total liabilities and equity $ 473,540 $ 536,150 216,000 111,850 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 $ 780,000 584, 100 8,300 14,992 172,608 4.11 3.73 $ 28,800 63,600 428,000 210,000. 99,452 Kyan Company $887,200 642,500 10,000 24,493 210,207 4.87 4.02 $ 58,200 109,400 362,500 216,000 75,307 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 (4 days' sales uncollected. (Do not round Intermediate calculations.) 1b. Identify the company you consider to be the better short-term credit risk.
Expert Solution
steps

Step by step

Solved in 7 steps with 10 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Balance Sheet Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS