Required information The following information applies to the questions displaye

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Required information The following information applies to the questions displayed below.) Summary information from the financial statements of two companies competing in the same industry follows. Barco Kyan Barco Kyan Company Company Company Company Data from the current year's income statement Sales Data from the current year-end balance sheets Assets Cash Accounts receivable, net Current notes receivable (trade) Merchandise inventory Prepaid expenses Plant assets, net Total assets $790,000 $880,200 590,100 648,500 11,000 15,185 24, 300 175,815 196,400 4.35 4.01 $ 22,000 33,400 10,000 31,000 Cost of goods sold 60,400 Interest expense 8,900 8,600 Income tax expense 84,440 138,500 Net income 6,200 7,850 Basic earnings per share 5.49 320,000310,400 Cash dividends per share $476,040 $556,750 3.73 Beginning-of-year balance sheet data Accounts receivable, net $ 25,800 52,200 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity $ 65,340 $103,300 Current notes receivable (trade) 79,800107,000 Merchandise inventory 160,000 226,000 Total assets 170,900 120,450 Common stock, $5 par value 65,600 115,400 448,000 402,500 160,000 226,000 114,445 105, 302 $476,040 $556,750 Retained earnings Required

Explanation / Answer

b) Acid test ratio = cash + accounts receivables+ short term investents / current liabilities

c) Accounts receivables turnover = net sales / average receivables

d) Inventory turnover = COGS / average inventory

Average inventory = (beginning inventory + ending inventory) /2

f) days sales uncollected = (recevables / net sales) * 365

  

Barco Kyan cash $22,000 $31,000 short term investments $10,000 $8,600 Accounts receivables $33,400 $60,400 Total quick assets $65,400 $1,00,000 Current liabilites $65,340 $1,03,300 Quick ratio 1:1 0.97:1

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