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To analyze each company’s asset and financing mix, compute the percentage that each asset, liability and equity item makes up of total assets for the company.. Comment on any[r]
(1)Module
Mathew & Michael
Below are the balance sheets of Mathew Company and Michael Company, both of which operate in the same industry
Mathew Company
Michael Company
Cash $ 1,000 $2,000
Investment securities 40,000 50,000
Accounts receivable 90,000 160,000
Inventory 120,000 200,000
Total current assets 251,000 412,000
Investments 150,000 200,000
Property, plant & equipment 240,000 950,000
Intangible assets 15,000 308,000
Total assets $656,000 $1,870,000
Accounts payable $14,000 $120,000
Accrued liabilities 12,000 60,000
Short-term loans payable 40,000 400,000
Current portion of long-term debt 100,000 -0- Total current liabilities 166,000 580,000
Long-term debt 240,000 295,000
Capital lease obligations 10,000 -0-
Deffered income tax liabilities 50,000 70,000
Total liabilities 466,000 945,000
Common stock, par value 10,000 200,000
Additional paid-in capital 100,000 500,000
Retained earnings 250,000 260,000
Treasury stock (150,000) (35,000)
Accumulated other comprehensive income (20,000) -0- Total liabilities & stockholders’ equity $656,000 $1,870,000
Required:
1 To analyze each company’s asset and financing mix, compute the percentage that each asset, liability and equity item makes up of total assets for the company
2 Comment on any differences in assets mix that you notice between the two companies
3 Comment on any differences in financing mix that you notice between the two companies
4 Michael Company reports no capital lease obligation Does this mean that Michael has not entered into any lease agreements? Explain your answer