ATC 9-8 Research Assignment Analyzing AutoZone’s Liquidity

Accounting for Current Liabilities and Payroll

ATC 9-8 Research Assignment Analyzing AutoZone’s Liquidity

Using either the most current Form 10-K for AutoZone, Inc. or the company’s annual report, answer the following questions. To obtain the Form 10-K, either use the EDGAR system (following the instructions in Appendix A), or the company’s website. The company’s annual report is available on its website.

Required

a. What is AutoZone’s current ratio?
b. Which of AutoZone’s current assets had the largest balance?
c. What percentage of AutoZone’s total assets consisted of current assets?
d. If AutoZone were a company that manufactured auto parts rather than a retailer of auto parts, how do you think its balance sheet would be different?

ATC 9-9 Spreadsheet Assignment

The following information is available for Lumberton Co. for the week ending June 28, Year 1. All employees are paid time and one-half for all hours over 40. Each employee has a cumulative salary of over $7,000, but less than $110,000. Assume the Social Security tax rate is 6 percent on the first $110,000 of wages and that the Medicare tax rate is 1.5 percent of total wages. The company contributes the retirement cost to a retirement plan for the employee.

Required

a. Set up a spreadsheet to compute the net pay for each of the preceding employees. You will need to insert the appropriate Excel formulas.

b. What is the total amount of compensation cost (salary cost plus payroll tax cost) for Lumberton Co. for the week ending June 28, Year 1?

c. Lumberton is considering adding group health insurance coverage for its employees to its benefits package. If the average cost of health insurance per employee is $3,900 per year, how much additional cost would be added to the weekly compensation cost for Lumberton? Assume the addition of health insurance and recompute the total compensation cost for Lumberton for the week ending June 28, Year 1.

ATC 9-10 Spreadsheet Assignment Mastering Excel

Refer to Problem 9-17A. Complete Requirements a, b, c, and d using an Excel spreadsheet. Refer to Chapter 1, Problem ATC 1-8, for ideas on how to structure the spreadsheet.