Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
Question
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Chapter D, Problem 35BP

1 a.

To determine

Compute the acid test ratio for Company A and Company G for the current year.

1. b

To determine

Compute inventory turnover ratio for Company A and Company G.

1. c

To determine

Compute days’ sales in receivable for Company A and Company G.

1 d.

To determine

Compute debt ratio for 2018 and 2017.

1. e

To determine

Compute earnings per share of common stock for Company A and Company G.

1.  f

To determine

Compute price/earnings ratio for Company A and Company G.

1. g

To determine

Compute dividend/ payout ratio for Company A and Company G.

2

To determine

Determine the Better investment strategy

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The industrial enterprise "HUANG S.A." purchased a sorting and packaging machine from a foreign company on 1/4/2017 at a cost of €500,000. The useful life of the machine was estimated by the Management at ten (10) years, while the residual value was estimated at zero. For the transportation of the machine from abroad to the company's factory, the amount of €20,000 was paid on 15/4/2017. As the insurance coverage of the machine during transportation was the responsibility of the selling company, HUANG S.A. proceeded to insure the machine from 16/4/2017 to 15/4/2018, paying the amount of €1,200. The delivery took place on 15/4/2017. As adequate ventilation of the multifunction device is essential for its proper operation, the company fitted an air duct on the multifunction device. The cost of the air duct amounted to €2,000 and was paid on 20/4/2017. On 25/4/2017, an external electrician was paid €5,000 for the electrical connection of the device. The company also paid €5,000 to an…
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Chapter D Solutions

Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)

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