Cash and Cash Equivalents: Cash is one of the most liquid assets which is a determinant of the liquidity position of any entity. Cash equivalents are short-term investments that can be converted into known amounts of cash without any significant risk of changes in value. Requirement 1 To Identify: The total amount of cash and cash equivalents for the fiscal years ended September 28, 2019, and September 29, 2018.

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Answer 1

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 1.5AA

a.

To determine

Cash and Cash Equivalents:

Cash is one of the most liquid assets which is a determinant of the liquidity position of any entity. Cash equivalents are short-term investments that can be converted into known amounts of cash without any significant risk of changes in value.

Requirement 1

To Identify:

The total amount of cash and cash equivalents for the fiscal years ended September 28, 2019, and September 29, 2018.

b.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 2

To compute:

Cash and cash equivalents as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the fiscal years ended 2019 and 2018.

c.

To determine

Horizontal Analysis:

In horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 3

To compute:

Percentage change between the beginning and ending cash and cash equivalents for the fiscal years ended 2019 and 2018.

d.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 4

To compute:

The days’ sales uncollected for both the fiscal year ending 2019 and 2018.

e.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 5

Whether A’s receivables collection is showing a favorable or unfavorable change.

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Express the Balance Sheets/Financial Position and Income Statement in common-size percents, using Year 2019 as base year. Round percents to one decimal. Do not put the percent when writing your answer. Refer to the format given Common-Size Comparative Financial Position In % At December 31 2021 2020 2019 Assets Cash

Perform a horizontal analysis for the balance sheet entry "Cash" given below. That is, find the amount of increase or decrease (in $) and the associated percent (rounded to the nearest tenth).

Perform a horizontal analysis for the balance sheet entry "Cash" given below. That is, find the amount of increase or decrease and the associated percent (rounded to the nearest tenth). Increase/Decrease Assets 2019 2018 Amount Percent Current Assets Cash $18,800 $12,900 ??? ??? Accounts Receivable 22,300 18,100 Merchandise Inventory 30,100 25,900 Supplies 5,600 7,600 Total Current Assets 76,800 64,500 Property, Plant, and Equipment Machinery and Equipment 56,000 57,100 Total Assets $132,800 $121,600 Step 1 In horizontal analysis, each item of the current period is compared in dollars and percent with the corresponding item from a previous period. First, the dollar difference between the most recent and previous periods will be found and entered in the Amount column for each entry. If the amount is a decrease, it is entered in parentheses. A horizontal analysis is to be done on the…

Answer 2

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 1.5AA

a.

To determine

Cash and Cash Equivalents:

Cash is one of the most liquid assets which is a determinant of the liquidity position of any entity. Cash equivalents are short-term investments that can be converted into known amounts of cash without any significant risk of changes in value.

Requirement 1

To Identify:

The total amount of cash and cash equivalents for the fiscal years ended September 28, 2019, and September 29, 2018.

b.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 2

To compute:

Cash and cash equivalents as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the fiscal years ended 2019 and 2018.

c.

To determine

Horizontal Analysis:

In horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 3

To compute:

Percentage change between the beginning and ending cash and cash equivalents for the fiscal years ended 2019 and 2018.

d.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 4

To compute:

The days’ sales uncollected for both the fiscal year ending 2019 and 2018.

e.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 5

Whether A’s receivables collection is showing a favorable or unfavorable change.

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Answer 3

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 1.5AA

a.

To determine

Cash and Cash Equivalents:

Cash is one of the most liquid assets which is a determinant of the liquidity position of any entity. Cash equivalents are short-term investments that can be converted into known amounts of cash without any significant risk of changes in value.

Requirement 1

To Identify:

The total amount of cash and cash equivalents for the fiscal years ended September 28, 2019, and September 29, 2018.

b.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 2

To compute:

Cash and cash equivalents as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the fiscal years ended 2019 and 2018.

c.

To determine

Horizontal Analysis:

In horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 3

To compute:

Percentage change between the beginning and ending cash and cash equivalents for the fiscal years ended 2019 and 2018.

d.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 4

To compute:

The days’ sales uncollected for both the fiscal year ending 2019 and 2018.

e.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 5

Whether A’s receivables collection is showing a favorable or unfavorable change.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 1.5AA

a.

To determine

Cash and Cash Equivalents:

Cash is one of the most liquid assets which is a determinant of the liquidity position of any entity. Cash equivalents are short-term investments that can be converted into known amounts of cash without any significant risk of changes in value.

Requirement 1

To Identify:

The total amount of cash and cash equivalents for the fiscal years ended September 28, 2019, and September 29, 2018.

b.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 2

To compute:

Cash and cash equivalents as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the fiscal years ended 2019 and 2018.

c.

To determine

Horizontal Analysis:

In horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 3

To compute:

Percentage change between the beginning and ending cash and cash equivalents for the fiscal years ended 2019 and 2018.

d.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 4

To compute:

The days’ sales uncollected for both the fiscal year ending 2019 and 2018.

e.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 5

Whether A’s receivables collection is showing a favorable or unfavorable change.

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Answer 5

Chapter 6, Problem 1.5AA

a.

To determine

Cash and Cash Equivalents:

Cash is one of the most liquid assets which is a determinant of the liquidity position of any entity. Cash equivalents are short-term investments that can be converted into known amounts of cash without any significant risk of changes in value.

Requirement 1

To Identify:

The total amount of cash and cash equivalents for the fiscal years ended September 28, 2019, and September 29, 2018.

b.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 2

To compute:

Cash and cash equivalents as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the fiscal years ended 2019 and 2018.

c.

To determine

Horizontal Analysis:

In horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 3

To compute:

Percentage change between the beginning and ending cash and cash equivalents for the fiscal years ended 2019 and 2018.

d.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 4

To compute:

The days’ sales uncollected for both the fiscal year ending 2019 and 2018.

e.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 5

Whether A’s receivables collection is showing a favorable or unfavorable change.

Answer 6

Chapter 6, Problem 1.5AA

a.

To determine

Cash and Cash Equivalents:

Cash is one of the most liquid assets which is a determinant of the liquidity position of any entity. Cash equivalents are short-term investments that can be converted into known amounts of cash without any significant risk of changes in value.

Requirement 1

To Identify:

The total amount of cash and cash equivalents for the fiscal years ended September 28, 2019, and September 29, 2018.

Answer 7

Chapter 6, Problem 1.5AA

a.

To determine

Cash and Cash Equivalents:

Cash is one of the most liquid assets which is a determinant of the liquidity position of any entity. Cash equivalents are short-term investments that can be converted into known amounts of cash without any significant risk of changes in value.

Requirement 1

To Identify:

The total amount of cash and cash equivalents for the fiscal years ended September 28, 2019, and September 29, 2018.

Answer 8

b.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 2

To compute:

Cash and cash equivalents as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the fiscal years ended 2019 and 2018.

Answer 9

b.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 2

To compute:

Cash and cash equivalents as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the fiscal years ended 2019 and 2018.

Answer 10

c.

To determine

Horizontal Analysis:

In horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 3

To compute:

Percentage change between the beginning and ending cash and cash equivalents for the fiscal years ended 2019 and 2018.

Answer 11

c.

To determine

Horizontal Analysis:

In horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 3

To compute:

Percentage change between the beginning and ending cash and cash equivalents for the fiscal years ended 2019 and 2018.

Answer 12

d.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 4

To compute:

The days’ sales uncollected for both the fiscal year ending 2019 and 2018.

Answer 13

d.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 4

To compute:

The days’ sales uncollected for both the fiscal year ending 2019 and 2018.

Answer 14

e.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 5

Whether A’s receivables collection is showing a favorable or unfavorable change.

Answer 15

e.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 5

Whether A’s receivables collection is showing a favorable or unfavorable change.

Answer 16

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Answer 19

Ch. 6 - Prob. 1QS Ch. 6 - Prob. 2QS Ch. 6 - Prob. 3QS Ch. 6 - Prob. 4QS Ch. 6 - Prob. 5QS Ch. 6 - Prob. 6QS Ch. 6 - Prob. 7QS Ch. 6 - Prob. 8QS Ch. 6 - Prob. 9QS Ch. 6 - Prob. 10QS

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