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1. If the following characteristics are observed when examining a balance sheet, identify which
type or types of company (manufacturing, retail, or service).
Characteristic
Type of
Company
a The company has no accounts receivable
b The company has no inventory
C Plant, property and equipment are 75% of total assets
d Work in process is 28% of current assets
e Plant, property and equipment are 10% of total assets
f The only current asset is cash
g The company has a large bank loan debt
h The company has raw materials inventory
i Finished goods inventory is 85% of current assets
j Current assets are 80% of total assets
Questions 2 through 6 refer to the current assets section of the balance sheets presented below.
2. What type of business is company A - retail, manufacturing, or service?
COMPANY A
Current Assets
Cash
$58,444
Accounts Receivable
$8,991
Inventory
$382,131
Total Current Assets
$449,566
3. What type of business is company B - retail, manufacturing, or service?
COMPANY B
Current Assets
Cash
$297,500
Accounts Receivable
$552,500
Total Current Assets
$850,000