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Shown below are selected financial datafor Company A and Company B at the end of the current year:   Company A Company B Net credit sales $675,000 $560,000 Cost of goods sold 504,000 480,000 Cash 53,000 22,000 Accounts receivable (net) 75,000 70,000 Inventory 84,000 160,000 Current liabilities 105,000 100,000 a)For each of the two companies, compute the following and FILL THE TABLE(10 points)   Company A Company B Working capital     Current ratio     Quick ratio     Accounts receivable turnover rate     Inventory turnover rate     Working capital: Company A: Company B: Current ratio: Company A: Company B: Quick ratio: Company A: Company B: Accounts receivable turnover rate Company A: Company B: Inventory turnover rate Company A: Company B: b)To which company would you prefer to sell $25,000 in merchandise on a 30-day open account? Company A or Company B

Accounting Jan 24, 2021

Shown below are selected financial datafor Company A and Company B at the end of the current year:

 

Company A

Company B

Net credit sales

$675,000

$560,000

Cost of goods sold

504,000

480,000

Cash

53,000

22,000

Accounts receivable (net)

75,000

70,000

Inventory

84,000

160,000

Current liabilities

105,000

100,000

a)For each of the two companies, compute the following and FILL THE TABLE(10 points)

 

Company A

Company B

Working capital

   

Current ratio

   

Quick ratio

   

Accounts receivable turnover rate

   

Inventory turnover rate

   

Working capital:

Company A:

Company B:

Current ratio:

Company A:

Company B:

Quick ratio:

Company A:

Company B:

Accounts receivable turnover rate

Company A:

Company B:

Inventory turnover rate

Company A:

Company B:

b)To which company would you prefer to sell $25,000 in merchandise on a 30-day open account? Company A or Company B.? Why?Explain (5 points)

Expert Solution

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