Shown below are selected financial data for Company a and Company B at the end of the current Company A Net credit sales 675,000 Cost of goods sold 504,000 Cash 53,000 Accounts receivable 75,000
Shown below are selected financial data for Company a and Company B at the end of the current Company A Net credit sales 675,000 Cost of goods sold 504,000 Cash 53,000 Accounts receivable 75,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Shown below are selected financial data for Company a and Company B at the end of the current
Company A
Net credit sales 675,000
Cost of goods sold 504,000
Cash 53,000
Inventory 84,000
Current liabilities 105,000
Company B
Net credit sales 560,000
Cost of goods sold 480,000
Cash 22,000
Accounts receivable 70,000
Inventory 160,000
Current liabilities 100,000
A) for each of the companies compute the
1.
2.
3. Quick ratio
4. Accounts receivable turnover
To which company would you prefer to sell $25,000 in merchandise on a 30-day open account? Company a or b and why
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