Choosing Between Two Companies Assets Bank Accounts Receivable Supplies Equipment Land and Building Total Assets Liabilities and Equity Accounts Payable Mortgage Payable Owner's Equity Total Liabilities and Equity Company A $ 21 500 3 000 1 300 15 600 254 000 $295 400 $ 22 800 122 000 150 600 $295 400 Company B $ 700 59 500 2 500 42 400 300 000 $405 100 $45 900 248 000 111 200 $405 100 CASE 3 Challenges Above are shown the balance sheets of two companies. Assume that each of the two companies has been forced out of business and must sell its assets for cash in order to pay its debts. Questions 1. Are the values shown necessarily the values you could get? Explain. 2. Are there any problems associated with selling the assets? Explain any problems you see and why they occur. 3. Which company would it be better to own? Write a short report (three to four paragraphs) explaining your position. Be prepared to give an oral report, if asked, based on your written report.

Choosing Between Two Companies Assets Bank Accounts Receivable Supplies Equipment Land and Building Total Assets Liabilities and Equity Accounts Payable Mortgage Payable Owner's Equity Total Liabilities and Equity Company A $ 21 500 3 000 1 300 15 600 254 000 $295 400 $ 22 800 122 000 150 600 $295 400 Company B $ 700 59 500 2 500 42 400 300 000 $405 100 $45 900 248 000 111 200 $405 100 CASE 3 Challenges Above are shown the balance sheets of two companies. Assume that each of the two companies has been forced out of business and must sell its assets for cash in order to pay its debts. Questions 1. Are the values shown necessarily the values you could get? Explain. 2. Are there any problems associated with selling the assets? Explain any problems you see and why they occur. 3. Which company would it be better to own? Write a short report (three to four paragraphs) explaining your position. Be prepared to give an oral report, if asked, based on your written report.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter24: Analysis Of Financial Statements

Section: Chapter Questions

Problem 10SPB: RATIO ANALY SIS OF COMPARATI VE FIN ANCIAL STATE MENT S Refer to the financial statements in Problem...

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