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The following accounting information exists for Aspen and Willow companies. Aspen $ 18,000 Cash Wages payable Merchandise inventory Building Accounts receivable Long-term notes payable Land Accounts payable Sales revenue Expenses 20,500 30,335 60,000 36,890 85,000 50,000 43,000 220,000 185,000 Willow $ 28,000 25,500 54,200 100,000 37,325 130,000 50,000 48,000 280,000 250,000 Required a-1. Determine the amount of current assets and current liabilities for each company. a-2. Compute the current ratio for each company. b. Assuming that all assets and liabilities are listed above, compute the debt-to-assets ratios for each company. c-1. Determine which company has the greater financial risk in the short term. c-2. Determine which company has the greater financial risk in the long term.

The following accounting information exists for Aspen and Willow companies. Aspen $ 18,000 Cash Wages payable Merchandise inventory Building Accounts receivable Long-term notes payable Land Accounts payable Sales revenue Expenses 20,500 30,335 60,000 36,890 85,000 50,000 43,000 220,000 185,000 Willow $ 28,000 25,500 54,200 100,000 37,325 130,000 50,000 48,000 280,000 250,000 Required a-1. Determine the amount of current assets and current liabilities for each company. a-2. Compute the current ratio for each company. b. Assuming that all assets and liabilities are listed above, compute the debt-to-assets ratios for each company. c-1. Determine which company has the greater financial risk in the short term. c-2. Determine which company has the greater financial risk in the long term.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 12GI: Consider each of the following independent situations. Should a company report the goods in its...
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A-1: determine the amount of current assets and current liabilities for each company A-2: compute the current ratio for each company B: assuming that all assets and liabilities are listed above, compute the debt to assets ratio for each company C-1: determine which company has the greater finiancial risk in the short term C-2: determine which company has the greater financial risk in the long term
The following accounting information exists for Aspen and Willow companies. Cash Wages payable Merchandise inventory Building Accounts receivable Long-term notes payable Land Accounts payable Sales revenue Expenses Aspen $ 18,000 20,500 30,335 60,000 36,890 85,000 50,000 43,000 220,000 185,000 Willow $ 28,000 25,500 54,200 100,000 37,325 130,000 50,000 48,000 280,000 250,000 Required a-1. Determine the amount of current assets and current liabilities for each company. a-2. Compute the current ratio for each company. b. Assuming that all assets and liabilities are listed above, compute the debt-to-assets ratios for each company. c-1. Determine which company has the greater financial risk in the short term. c-2. Determine which company has the greater financial risk in the long term.
Transcribed Image Text:The following accounting information exists for Aspen and Willow companies. Cash Wages payable Merchandise inventory Building Accounts receivable Long-term notes payable Land Accounts payable Sales revenue Expenses Aspen $ 18,000 20,500 30,335 60,000 36,890 85,000 50,000 43,000 220,000 185,000 Willow $ 28,000 25,500 54,200 100,000 37,325 130,000 50,000 48,000 280,000 250,000 Required a-1. Determine the amount of current assets and current liabilities for each company. a-2. Compute the current ratio for each company. b. Assuming that all assets and liabilities are listed above, compute the debt-to-assets ratios for each company. c-1. Determine which company has the greater financial risk in the short term. c-2. Determine which company has the greater financial risk in the long term.
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