ummary 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 $ 780,000 $ 883,200 Cash $ 19,000 $ 37,000 Cost of goods sold 589,100 644,500 Accounts receivable, net 37,400 54,400 Interest expense 8,000 12,000 Merchandise inventory 84,340 136,500 Income tax expense 14,992 24,383 Prepaid expenses 5,800 7,350 Net income 167,908 202,317 Plant assets, net 370,000 310,400 Basic earnings per share 4.66 4.68 Total assets $ 516,540 $ 545,650 Cash dividends per share 3.72 3.99 Liabilities and Equity Beginning-of-year balance sheet data Current liabilities $ 67,340 $ 97,300 Accounts receivable, net $ 28,800 $ 50,200 Long-term notes payable 86,800 111,000 Merchandise inventory 59,600 113,400 Common stock, $5 par value 180,000 216,000 Total assets 438,000 392,500 Retained earnings 182,400 121,350 Common stock, $5 par value 180,000 216,000 Total liabilities and equity $ 516,540 $ 545,650 Retained earnings 148,412 91,401 Required: 1a. Current Ration 1a. Acid Test Ratio
ummary 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 $ 780,000 $ 883,200 Cash $ 19,000 $ 37,000 Cost of goods sold 589,100 644,500 Accounts receivable, net 37,400 54,400 Interest expense 8,000 12,000 Merchandise inventory 84,340 136,500 Income tax expense 14,992 24,383 Prepaid expenses 5,800 7,350 Net income 167,908 202,317 Plant assets, net 370,000 310,400 Basic earnings per share 4.66 4.68 Total assets $ 516,540 $ 545,650 Cash dividends per share 3.72 3.99 Liabilities and Equity Beginning-of-year balance sheet data Current liabilities $ 67,340 $ 97,300 Accounts receivable, net $ 28,800 $ 50,200 Long-term notes payable 86,800 111,000 Merchandise inventory 59,600 113,400 Common stock, $5 par value 180,000 216,000 Total assets 438,000 392,500 Retained earnings 182,400 121,350 Common stock, $5 par value 180,000 216,000 Total liabilities and equity $ 516,540 $ 545,650 Retained earnings 148,412 91,401 Required: 1a. Current Ration 1a. Acid Test Ratio
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 41E
Related questions
Question
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 | $ 780,000 | $ 883,200 | ||
| Cash | $ 19,000 | $ 37,000 | Cost of goods sold | 589,100 | 644,500 |
| 37,400 | 54,400 | Interest expense | 8,000 | 12,000 | |
| Merchandise inventory | 84,340 | 136,500 | Income tax expense | 14,992 | 24,383 |
| Prepaid expenses | 5,800 | 7,350 | Net income | 167,908 | 202,317 |
| Plant assets, net | 370,000 | 310,400 | Basic earnings per share | 4.66 | 4.68 |
| Total assets | $ 516,540 | $ 545,650 | Cash dividends per share | 3.72 | 3.99 |
| Liabilities and Equity | Beginning-of-year |
||||
| Current liabilities | $ 67,340 | $ 97,300 | Accounts receivable, net | $ 28,800 | $ 50,200 |
| Long-term notes payable | 86,800 | 111,000 | Merchandise inventory | 59,600 | 113,400 |
| Common stock, $5 par value | 180,000 | 216,000 | Total assets | 438,000 | 392,500 |
| 182,400 | 121,350 | Common stock, $5 par value | 180,000 | 216,000 | |
| Total liabilities and equity | $ 516,540 | $ 545,650 | Retained earnings | 148,412 |
91,401 |
Required:
1a. Current Ration
1a. Acid Test Ratio
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
1A Current
1A Acid Test
1A Acct Rec
1A Invent
1A Days Sal in
1A Days Sal
1B short term
Ratio
Ratio
Turn
Turnover
Inv
Uncol
For both companies compute the current ratio.
(a)
Current Ratio
Company
Numerator:
Denominator:
Current Ratio
Current ratio
%D
Barco
to 1
| Кyan
to 1
1A Current Ratio
1A Acid Test Ratio
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
1A Current
1A Acid Test
1A Acct Rec
1A Invent
1A Days Sal in
1A Days Sal
1B short term
Ratio
Ratio
Turn
Turnover
Inv
Uncol
For both companies compute the acid-test ratio.
(b)
Acid-Test Ratio
Company
Numerator:
Denominator:
Acid-T
%3D
+
Acid-1
%D
Barco
+
+
Кyan
+
1A Current Ratio
1A Acct Rec Turn
>
II
+
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