h2 - Problem Set#2 Solutions 16 Assets Current assets Cash...

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Problem Set #2 – Solutions 16. 2006 Sources/U ses 2007 Assets Current assets Cash $ 15,183 1,002 U $ 16,185 Accounts receivable 35,61 2 1,514 U 37,126 Inventory 62,18 2 2,671 U 64,853 Total $ 112,977 5,187 U $118,16 4 Fixed assets Net plant and equipment 327,15 6 31,007 U 358,163 Total assets $ 440,133 36,194 U $476,32 7 Liabilities and Owners’ Equity Current liabilities Accounts payable $ 78,159 –18,850 U $ 59,309 Notes payable 46,382 1,786 S 48,168 Total $ 124,541 –17,064 U $107,47 7 Long-term debt 60,00 0 15,000 S 75,000 Owners' equity Common stock and paid-in surplus $ 90,000 0 $ 90,000 Accumulated retained earnings 165,59 2 38,258 S 203,850 Total $ 255,592 38,258 S $293,85 0 Total liabilities and owners' equity $ 440,133 36,194 S $476,32 7 The firm used $36,194 in cash to acquire new assets. It raised this amount of cash by increasing liabilities and owners’ equity by $36,194. In particular, the needed funds were raised by internal financing (on a net basis), out of the additions to retained earnings and by an issue of long-term debt.
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18. This is a multi-step problem involving several ratios. The ratios given are all part of
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This note was uploaded on 07/21/2009 for the course BUAD 306 taught by Professor Selvili during the Spring '07 term at USC.

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h2 - Problem Set#2 Solutions 16 Assets Current assets Cash...

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