Principles of Fin

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3.

Current assets current liabilities

Cash \$250,000 accounts payable \$620,0000

Accounts receivable Notes payable to

(_1,340,000_ less) banks 130,000

Allowance for doubtful accounts accrued wages 400,000

Of \$20,000 1,320,000 taxes owed 100,000

Inventory 1 total current

,410,000 liabilities 1,250,000

Total current assets 2,980,000 long-term debt ????

Land stockholders equity

Plant and equipment preferred stock 1,000,000

((\$2800,000 less common stock

Accumulated (\$1 par, 750,000

Depreciation shares authorized,

_690,000_______) 2,110,000 700,000 outstanding)

Total assets \$5,390,000 retained earnings ????

Total stockholders

equity \$3,140,000

Total liabilities and

Equity \$4,390,000

8.

Cash 100,000

Accounts receivable 357,000

Inventory 458,000

Current liabilities 498,000

Long-term debt 610,000

Equity 598,000

Current ratio: current ratio = current assets/current liabilities

100000 + 357000 + 458000 + 598000 / 498000 = 1.84

Quick ratio: current assets- inventory / current liabilities

100000 + 357000 + 598000/498000 = 2.12 (?)

(Having difficulty identifying what items are included in assets)

9. If a firm has sales of \$45,689,000 a year and the average collection period for the industry is 45 days, what should this firm’s account receivable be if the firm is comparable to the industry?

11. A firm with sales of \$500,000 has average inventory of \$200,000. The industry average for the inventory turnover is four times a year. What would be the reduction in inventory if this firm were to achieve a turnover comparable to the industry average?

200,000 x 4 = \$800,000

800,000 – 500,000 = 300,000

300,000 / 4= 75,000

I am assuming that this is the formula to match the comparison for the industry average…

(Professor Curlett, I will attempt to contact you during your working hours to ask for...