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PROTECTED VIEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Q17 fx C E 1 Two companies competing in the same industry are being evaluated by a bank that can lend money to 2 only one of them. Summary information from the financial statements of the two companies follows: G H. K M Rowland Pierce Rowland Pierce Company Data from the current year-end balance sheets: Company Company Data from the current year's income statements: Company Assets Cash 19.500 34,000 Sales 770,000 880.200 Accounts Rec, net 37,400 57,400 Cost of Goods sold 585.100 632.500 Current note receivable Mdse Inventory Prepaid expenses 9.100 7,200 Interest Expense Income tax expense 7.900 13,000 84,440 132,500 14,800 24.300 5,000 6,950 Net income 162,200 210,400 Plant assets, net 290.000 Common shares outstanding 304,400 36,000 41,200 Total assets 445.440 542,450 Beginning of year balance sheet data: Accounts Receivable, net Liabilities and Equity 29.800 54.200 Current liabilities 61,340 93,300 Current Notes Receivable LT Notes Payable 80.800 101.000 Mdse Inventory 55,600 107.400 Common stock, $5 par value 180,000 206.000 Plant assets, net 287.100 178,900 Retained Earnings Total liabilities and equity 123,300 142,150 Total Assets 398,000 382,500 445.440 542,450 Common Stock 180,000 206.000 Retained Earnings 98,300 93,600 Required: 1 For both companies compute: a. Current ratio d. Net Assets b. Accounts Receivable turnover (includes notes) e. Debt ratio c. Inventory turnover f. Times Interest Earned

PROTECTED VIEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Q17 fx C E 1 Two companies competing in the same industry are being evaluated by a bank that can lend money to 2 only one of them. Summary information from the financial statements of the two companies follows: G H. K M Rowland Pierce Rowland Pierce Company Data from the current year-end balance sheets: Company Company Data from the current year's income statements: Company Assets Cash 19.500 34,000 Sales 770,000 880.200 Accounts Rec, net 37,400 57,400 Cost of Goods sold 585.100 632.500 Current note receivable Mdse Inventory Prepaid expenses 9.100 7,200 Interest Expense Income tax expense 7.900 13,000 84,440 132,500 14,800 24.300 5,000 6,950 Net income 162,200 210,400 Plant assets, net 290.000 Common shares outstanding 304,400 36,000 41,200 Total assets 445.440 542,450 Beginning of year balance sheet data: Accounts Receivable, net Liabilities and Equity 29.800 54.200 Current liabilities 61,340 93,300 Current Notes Receivable LT Notes Payable 80.800 101.000 Mdse Inventory 55,600 107.400 Common stock, $5 par value 180,000 206.000 Plant assets, net 287.100 178,900 Retained Earnings Total liabilities and equity 123,300 142,150 Total Assets 398,000 382,500 445.440 542,450 Common Stock 180,000 206.000 Retained Earnings 98,300 93,600 Required: 1 For both companies compute: a. Current ratio d. Net Assets b. Accounts Receivable turnover (includes notes) e. Debt ratio c. Inventory turnover f. Times Interest Earned

Century 21 Accounting General Journal
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter24: Recording International And Internet Sales
Section: Chapter Questions
Problem 1CS
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Home Insert Draw Page Layout Formulas Data Review View Help PROTECTED VIEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable E Q17 fix A C F H. K Two companies competing in the same industry are being evaluated by a bank that can lend money to 2 only one of them. Summary information from the financial statements of the two companies follows: 1 3. 4. Rowland Pierce Rowland Pierce Company 6 Data from the current year-end balance sheets: Company Company Data from the current year's income statements: Company 7 8 Assets 9 Cash 10 Accounts Rec, net 19,500 34,000 Sales 770,000 880.200 37,400 57,400 Cost of Goods sold 585,100 632.500 11 Current note receivable 2 Mdse Inventory 3 Prepaid expenses 4 Plant assets, net 9,100 7,200 Interest Expense 7,900 13,000 84,440 132,500 Income tax expense 14,800 24.300 5,000 6,950 Net income 162,200 210,400 290,000 304,400 Common shares outstanding 36,000 41,200 5 Total assets 445,440 542,450 Beginning of year balance sheet data: 7Liabilities and Equity 3 Current liabilities 9LT Notes Payable O Common stock, $5 par value Retained Earnings Total liabilities and equity Accounts Receivable, net 29,800 54,200 61,340 93,300 Current Notes Receivable 80,800 101,000 Mdse Inventory 55,600 107,400 180,000 206,000 Plant assets, net 287,100 178,900 123,300 142,150 Total Assets 398,000 382,500 445,440 542,450 Common Stock 180,000 206,000 Retained Earnings 98,300 93,600 Required: 1 For both companies compute: a. Current ratio d. Net Assets b. Accounts Receivable turnover (includes notes) e. Debt ratio c. Inventory turnover f. Times Interest Earned Identify the company you consider to be the better credit risk (evaluate liquidity and solvency) and explain why.
Transcribed Image Text:Home Insert Draw Page Layout Formulas Data Review View Help PROTECTED VIEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable E Q17 fix A C F H. K Two companies competing in the same industry are being evaluated by a bank that can lend money to 2 only one of them. Summary information from the financial statements of the two companies follows: 1 3. 4. Rowland Pierce Rowland Pierce Company 6 Data from the current year-end balance sheets: Company Company Data from the current year's income statements: Company 7 8 Assets 9 Cash 10 Accounts Rec, net 19,500 34,000 Sales 770,000 880.200 37,400 57,400 Cost of Goods sold 585,100 632.500 11 Current note receivable 2 Mdse Inventory 3 Prepaid expenses 4 Plant assets, net 9,100 7,200 Interest Expense 7,900 13,000 84,440 132,500 Income tax expense 14,800 24.300 5,000 6,950 Net income 162,200 210,400 290,000 304,400 Common shares outstanding 36,000 41,200 5 Total assets 445,440 542,450 Beginning of year balance sheet data: 7Liabilities and Equity 3 Current liabilities 9LT Notes Payable O Common stock, $5 par value Retained Earnings Total liabilities and equity Accounts Receivable, net 29,800 54,200 61,340 93,300 Current Notes Receivable 80,800 101,000 Mdse Inventory 55,600 107,400 180,000 206,000 Plant assets, net 287,100 178,900 123,300 142,150 Total Assets 398,000 382,500 445,440 542,450 Common Stock 180,000 206,000 Retained Earnings 98,300 93,600 Required: 1 For both companies compute: a. Current ratio d. Net Assets b. Accounts Receivable turnover (includes notes) e. Debt ratio c. Inventory turnover f. Times Interest Earned Identify the company you consider to be the better credit risk (evaluate liquidity and solvency) and explain why.
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