The following accounting information exists for Aspen and Willow companies. Aspen Willow Cash $ 18,000 $ 28,000 Wages payable 20,500 24,000 Merchandise inventory 25,035 59,600 Building 60,000 120,000 Accounts receivable 33,710 40,625 Long-term notes payable 75,000 130,000 Land 45,000 50,000 Accounts payable 37,000 43,500 Sales revenue 220,000 280,000 Expenses 185,000 235,000 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 Willow Cash $ 18,000 $ 28,000 Wages payable 20,500 24,000 Merchandise inventory 25,035 59,600 Building 60,000 120,000 Accounts receivable 33,710 40,625 Long-term notes payable 75,000 130,000 Land 45,000 50,000 Accounts payable 37,000 43,500 Sales revenue 220,000 280,000 Expenses 185,000 235,000 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

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.12E: Inventory analysis Costco Wholesale Corporation (COST) and Wal-Mart Stores Inc. (WMT) compete...

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	Aspen	Willow
Cash	$ 18,000	$ 28,000
Wages payable	20,500	24,000
Merchandise inventory	25,035	59,600
Building	60,000	120,000
Accounts receivable	33,710	40,625
Long-term notes payable	75,000	130,000
Land	45,000	50,000
Accounts payable	37,000	43,500
Sales revenue	220,000	280,000
Expenses	185,000	235,000

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