You are given the two financial statements (the photo below). The owner, Mr. Howell, has asked you to give recommendations as to how he can improve the working capital of the shop. Enumerate what he can do to improve his operations. State the basis of your claim and any supporting computation. AssetsCurrent assetsCashAccounts receivableInventoryTotal Current assetsLong-term assetsFurniture, equipment,net of depreciationTotal AssetsLiabilities and Owner's equityCurrent liabilitiesAccounts payableLong-term liabilitiesLoanTotal LiabilitiesOwner's equityTotal Liabilitiesand Owner's equityThe College ShopComparative Balance SheetAs of December 31, 20x7 and 20×6SalesLess Cost of goods soldGross profitLess Operating expensesOperating incomeLess InterestLess Income taxesNet income12/31/20X7$76,00092,000110,000278,00090,000368,000$70,000100,000170,000198,000The College ShopComparative Income StatementYears Ended December 31, 20×7 and 20×612/31/20X7$600,000387,000213,000$368,000180,00033,00010,0005,000$18,00012/31/20X6$70,00090,00080,000240,000120,000$360,00080,000100,000180,000180,000$360,00012/31/20X6$500,000275,000225,000175,00050,00010,00010,000$30,000

Business is defined as any activity that assists in earning an income to the owner or the person who…

You are given the two financial statements (the photo below). The owner, Mr. Howell, has asked you to give recommendations as to how he can improve the working capital of the shop. Enumerate what he can do to improve his operations. State the basis of your claim and any supporting computation.

You are given the two financial statements (the photo below). The owner, Mr. Howell, has asked you to give recommendations as to how he can improve the working capital of the shop. Enumerate what he can do to improve his operations. State the basis of your claim and any supporting computation.

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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