Chapter 7 Solutions

Chapter 7 Solutions - 7 1 Dell Incorporated Summary ...

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Unformatted text preview: 7- 1 Dell Incorporated Summary Financial Data (millions) Fiscal Year 2006 Revenue \$55,908 Cost of Good Sold \$45,620 Accounts Receivable \$5,452 Inventory \$576 Accounts Payable \$9,840 A/R Days Inventory Days A/P Days Cash Cycle (days) Dell 35.6 4.6 78.7 - 38.5 Amazon.com 14.5 41 106 - 50.5 7- 2 Industry Terms 20 30 15 35 Alternative Terms 45 25 10 60 Revenue Cost of Goods Sold \$3,000,000 \$2,100,000 \$3,600,000 \$2,520,000 A/R Balance Inventory Balance A/P Balance Working Capital \$164,384 \$172,603 \$86,301 \$250,685 \$443,836 \$172,603 \$69,041 \$547,397 A/R Days Inventory Days A/P Days Cash Cycle 7- 3 Financing Needs and Working Capital Policy Column: 1 2 3 4 5 Pricing Policy Price/Unit \$10.00 Quantity per Day 100 Revenue/Da y \$1,000 Credit Policy Days 45 Accounts Receivable \$45,000 Inventory Policy Days 12 The base case proﬁt is \$350/day, calculated as \$1,000 (Revenue) - \$400 (Materials cost) - \$250 (Labor cost). a. With inelasGc demand, a price increase to \$11 reduces the quanGty per day to 95 and proﬁt is \$1,045 - \$380 - \$238 = \$428. With elasGc demand, the same price increase reduces daily demand to 80 units and the proﬁt is \$880 - \$320 - \$200 = \$360/day. b. Selling only for cash with volume of 90 units per day yields a proﬁt of \$900 - \$360 - \$225 = \$315/day. If the price is reduced to \$9.50 and daily volume stays at 100, the daily proﬁt is \$950 - \$400 - \$250 = \$300. c. Increasing sales to 105 units produces a proﬁt of \$1,050 - \$420 - \$263 = \$368/day. d. Reducing the cost of materials to \$4.10/unit, makes the daily proﬁt \$1,000 - \$410 - \$250 - \$340. e. If wages increase to \$2.60 per unit, the proﬁt is \$1,000 - \$400 - \$260 = \$340/ day. Materials Inventory \$4,800 Purchasing Policy Materials Cost/Unit \$4.00 Quantity per Day Materials Cost/Day 100 \$400 Payables Policy Days 10 Inventory Policy Days 5 Wage Policy Labor Cost/Unit \$2.50 6 Quantity per Day 100 Accounts Payable \$4,000 Finished Goods Inventory \$3,250 Labor Cost/Day \$250 Payroll Policy Days 7 Daily Profit = \$350 Wages Payable \$1,750 Current Assets Current Liabilities \$53,050 \$5,750 Net Working Capital \$47,300 7- 4 Bennis Co. Income Statement Revenue Cost of Goods Gross Profit Operating Expenses Pre- Tax Profit Tax Expense Net Income Balance Sheet Cash A/R Inventory Total Current Assets Fixed Assets, Gross Accumulated Depreciation Fixed Assets, Net Total Assets Accounts Payable Owner's Equity Total Liabilities and Equity Time 0 Year 1 \$800,000 (\$528,000) \$272,000 (\$160,000) \$112,000 (\$39,200) \$72,800 \$15,840 \$80,000 \$58,667 \$154,507 \$500,000 (\$30,000) \$470,000 \$624,507 \$508,309 \$43,397 \$581,109 \$624,507 34% Gross Margin 20% of Revenue 35% of Pre- Tax Profit 3% of COGS 10% of Revenue 9 Inventory Turnover 30 days Statement of Cash Flows Net Income Plus: Depreciation Change in A/R Change in Inventory Change in A/P Operating Cash Flow Fixed Asset Investment Net Cash Flow Beginning Cash Ending Cash \$72,800 \$30,000 (\$80,000) (\$58,667) \$43,397 \$7,531 (\$500,000) (\$492,469) \$508,309 \$15,840 7- 5 Spreadsheet shows part (a) solution. Column on right is for making Problem 6 adjustments. 9 10 11 13 14 15 12 16 Year Balance Sheet Cash Accounts receivable Inventory Net working capital Capital assets at cost less Accumulated Depreciation Net capital assets Total assets Accounts payable Total equity 0 1 2 3 4 \$200,000 \$40,000 \$240,000 \$80,000 \$328,000 \$2,500,000 \$500,000 \$2,000,000 \$2,360,000 \$32,000 \$2,328,000 \$120,000 \$720,000 \$240,000 \$984,000 \$2,500,000 \$1,000,000 \$1,500,000 \$2,580,000 \$96,000 \$2,484,000 \$240,000 \$1,440,000 \$480,000 \$1,968,000 \$2,500,000 \$1,500,000 \$1,000,000 \$3,160,000 \$192,000 \$2,968,000 \$360,000 \$2,160,000 \$720,000 \$2,952,000 \$2,500,000 \$2,000,000 \$500,000 \$3,740,000 \$288,000 \$3,452,000 \$200,000 \$2,500,000 \$2,500,000 \$2,700,000 \$2,700,000 Invent. Pct 10% Adj Growth Income Statement Sales Cost of goods sold Gross profit Cash operating expenses Depreciation expense Taxable income less loss carry forward Tax liability Net income \$800,000 \$320,000 \$480,000 \$620,000 \$500,000 (\$640,000) \$0 \$0 (\$640,000) \$2,400,000 \$960,000 \$1,440,000 \$860,000 \$500,000 \$80,000 \$80,000 \$0 \$80,000 \$4,800,000 \$1,920,000 \$2,880,000 \$1,220,000 \$500,000 \$1,160,000 \$560,000 \$210,000 \$950,000 \$7,200,000 \$2,880,000 \$4,320,000 \$1,580,000 \$500,000 \$2,240,000 \$0 \$784,000 \$1,456,000 Cash Flow Statement 17 Net Income 18 plus: Depreciation expense 19 less: Incr. in Accts. Receivable less: Incr. in Inventory plus: Incr. in Accts. Payable Operating Cash Flow Beginning case Interim ending cash Required ending cash New financing required (\$640,000) \$500,000 (\$240,000) (\$80,000) \$32,000 (\$428,000) \$200,000 (\$228,000) \$40,000 \$268,000 \$80,000 \$500,000 (\$480,000) (\$160,000) \$64,000 \$4,000 \$40,000 \$44,000 \$120,000 \$76,000 \$950,000 \$500,000 (\$720,000) (\$240,000) \$96,000 \$586,000 \$120,000 \$706,000 \$240,000 (\$466,000) \$1,456,000 \$500,000 (\$720,000) (\$240,000) \$96,000 \$1,092,000 \$240,000 \$1,332,000 \$360,000 (\$972,000) \$0 \$640,000 \$0 \$640,000 \$640,000 \$0 \$80,000 \$560,000 \$560,000 \$0 \$560,000 \$0 1 2 3 4 5 6 7 8 9 Tax Loss Carry Forward Beginning Balance Loss for Year Application to Gain Ending Balance 1 \$0 \$0 \$0 \$0 Note: As this spreadsheet is set up, the cash account is set to equal required cash and is used to calculate the amount of new financing required in the cash flow statement. Interim ending cash is what the cash balance would have been if required cash were ignored. New financing required affects the ending balance sheed each period by increasing cash to the target level and increasing equity to match. To see the statements before the infusions, try setting cash in the balance sheet equal to interim ending cash. That will show new financing required of zero, and the equity infusions can be seen as the difference between the equity account as shown here and the equity account with no new financing. CGS Pct 40% 7- 6(a) Spreadsheet shows part (a) solution. Column on right is for making Problem 6 adjustments. 9 10 11 13 14 15 12 16 Year Balance Sheet Cash Accounts receivable Inventory Net working capital Capital assets at cost less Accumulated Depreciation Net capital assets Total assets Accounts payable Total equity 0 1 2 3 4 \$200,000 \$40,000 \$240,000 \$80,000 \$328,000 \$2,500,000 \$500,000 \$2,000,000 \$2,360,000 \$32,000 \$2,328,000 \$60,000 \$360,000 \$120,000 \$492,000 \$2,500,000 \$1,000,000 \$1,500,000 \$2,040,000 \$48,000 \$1,992,000 \$60,000 \$360,000 \$120,000 \$492,000 \$2,500,000 \$1,500,000 \$1,000,000 \$1,540,000 \$48,000 \$1,492,000 \$45,000 \$270,000 \$90,000 \$369,000 \$2,500,000 \$2,000,000 \$500,000 \$905,000 \$36,000 \$869,000 \$200,000 \$2,500,000 \$2,500,000 \$2,700,000 \$2,700,000 Income Statement Sales Cost of goods sold Gross profit Cash operating expenses Depreciation expense Taxable income less loss carry forward Tax liability Net income \$800,000 \$320,000 \$480,000 \$620,000 \$500,000 (\$640,000) \$0 \$0 (\$640,000) \$1,200,000 \$480,000 \$720,000 \$680,000 \$500,000 (\$460,000) \$0 \$0 (\$460,000) \$1,200,000 \$480,000 \$720,000 \$680,000 \$500,000 (\$460,000) \$0 \$0 (\$460,000) \$900,000 \$360,000 \$540,000 \$635,000 \$500,000 (\$595,000) \$0 \$0 (\$595,000) Cash Flow Statement 17 Net Income 18 plus: Depreciation expense 19 less: Incr. in Accts. Receivable less: Incr. in Inventory plus: Incr. in Accts. Payable Operating Cash Flow Beginning case Interim ending cash Required ending cash New financing required (\$640,000) \$500,000 (\$240,000) (\$80,000) \$32,000 (\$428,000) \$200,000 (\$228,000) \$40,000 \$268,000 (\$460,000) \$500,000 (\$120,000) (\$40,000) \$16,000 (\$104,000) \$40,000 (\$64,000) \$60,000 \$124,000 (\$460,000) \$500,000 \$0 \$0 \$0 \$40,000 \$60,000 \$100,000 \$60,000 (\$40,000) (\$595,000) \$500,000 \$90,000 \$30,000 (\$12,000) \$13,000 \$60,000 \$73,000 \$45,000 (\$28,000) 1 2 3 4 5 6 7 8 9 Tax Loss Carry Forward Beginning Balance Loss for Year Application to Gain Ending Balance \$0 \$640,000 \$0 \$640,000 \$640,000 \$460,000 \$0 \$1,100,000 \$1,100,000 \$460,000 \$0 \$1,560,000 \$1,560,000 \$595,000 \$0 \$2,155,000 Invent. Pct 10% Adj Growth 0.5 CGS Pct 40% 7- 6(b) Spreadsheet shows part (a) solution. Column on right is for making Problem 6 adjustments. 9 10 11 13 14 15 12 16 Year Balance Sheet Cash Accounts receivable Inventory Net working capital Capital assets at cost less Accumulated Depreciation Net capital assets Total assets Accounts payable Total equity 0 1 2 3 4 \$200,000 \$40,000 \$240,000 \$80,000 \$312,000 \$2,500,000 \$500,000 \$2,000,000 \$2,360,000 \$48,000 \$2,312,000 \$120,000 \$720,000 \$240,000 \$936,000 \$2,500,000 \$1,000,000 \$1,500,000 \$2,580,000 \$144,000 \$2,436,000 \$240,000 \$1,440,000 \$480,000 \$1,872,000 \$2,500,000 \$1,500,000 \$1,000,000 \$3,160,000 \$288,000 \$2,872,000 \$360,000 \$2,160,000 \$720,000 \$2,808,000 \$2,500,000 \$2,000,000 \$500,000 \$3,740,000 \$432,000 \$3,308,000 \$200,000 \$2,500,000 \$2,500,000 \$2,700,000 \$2,700,000 Invent. Pct 10% Adj Growth Income Statement Sales Cost of goods sold Gross profit Cash operating expenses Depreciation expense Taxable income less loss carry forward Tax liability Net income \$800,000 \$480,000 \$320,000 \$620,000 \$500,000 (\$800,000) \$0 \$0 (\$800,000) \$2,400,000 \$1,440,000 \$960,000 \$860,000 \$500,000 (\$400,000) \$0 \$0 (\$400,000) \$4,800,000 \$2,880,000 \$1,920,000 \$1,220,000 \$500,000 \$200,000 \$200,000 \$0 \$200,000 \$7,200,000 \$4,320,000 \$2,880,000 \$1,580,000 \$500,000 \$800,000 \$800,000 \$0 \$800,000 Cash Flow Statement 17 Net Income 18 plus: Depreciation expense 19 less: Incr. in Accts. Receivable less: Incr. in Inventory plus: Incr. in Accts. Payable Operating Cash Flow Beginning case Interim ending cash Required ending cash New financing required (\$800,000) \$500,000 (\$240,000) (\$80,000) \$48,000 (\$572,000) \$200,000 (\$372,000) \$40,000 \$412,000 (\$400,000) \$500,000 (\$480,000) (\$160,000) \$96,000 (\$444,000) \$40,000 (\$404,000) \$120,000 \$524,000 \$200,000 \$500,000 (\$720,000) (\$240,000) \$144,000 (\$116,000) \$120,000 \$4,000 \$240,000 \$236,000 \$800,000 \$500,000 (\$720,000) (\$240,000) \$144,000 \$484,000 \$240,000 \$724,000 \$360,000 (\$364,000) \$800,000 \$400,000 \$0 \$1,200,000 \$1,200,000 \$0 \$200,000 \$1,000,000 \$1,000,000 \$0 \$800,000 \$200,000 1 2 3 4 5 6 7 8 9 Tax Loss Carry Forward Beginning Balance Loss for Year Application to Gain Ending Balance 1 \$0 \$800,000 \$0 \$800,000 CGS Pct 60% 7- 6(c) Spreadsheet shows part (a) solution. Column on right is for making Problem 6 adjustments. 9 10 11 13 14 15 12 16 Year Balance Sheet Cash Accounts receivable Inventory Net working capital Capital assets at cost less Accumulated Depreciation Net capital assets Total assets Accounts payable Total equity 0 1 2 3 4 \$200,000 \$40,000 \$240,000 \$240,000 \$488,000 \$2,500,000 \$500,000 \$2,000,000 \$2,520,000 \$32,000 \$2,488,000 \$120,000 \$720,000 \$720,000 \$1,464,000 \$2,500,000 \$1,000,000 \$1,500,000 \$3,060,000 \$96,000 \$2,964,000 \$240,000 \$1,440,000 \$1,440,000 \$2,928,000 \$2,500,000 \$1,500,000 \$1,000,000 \$4,120,000 \$192,000 \$3,928,000 \$360,000 \$2,160,000 \$2,160,000 \$4,392,000 \$2,500,000 \$2,000,000 \$500,000 \$5,180,000 \$288,000 \$4,892,000 \$200,000 \$2,500,000 \$2,500,000 \$2,700,000 \$2,700,000 Invent. Pct 30% Adj Growth Income Statement Sales Cost of goods sold Gross profit Cash operating expenses Depreciation expense Taxable income less loss carry forward Tax liability Net income \$800,000 \$320,000 \$480,000 \$620,000 \$500,000 (\$640,000) \$0 \$0 (\$640,000) \$2,400,000 \$960,000 \$1,440,000 \$860,000 \$500,000 \$80,000 \$80,000 \$0 \$80,000 \$4,800,000 \$1,920,000 \$2,880,000 \$1,220,000 \$500,000 \$1,160,000 \$560,000 \$210,000 \$950,000 \$7,200,000 \$2,880,000 \$4,320,000 \$1,580,000 \$500,000 \$2,240,000 \$0 \$784,000 \$1,456,000 Cash Flow Statement 17 Net Income 18 plus: Depreciation expense 19 less: Incr. in Accts. Receivable less: Incr. in Inventory plus: Incr. in Accts. Payable Operating Cash Flow Beginning case Interim ending cash Required ending cash New financing required (\$640,000) \$500,000 (\$240,000) (\$240,000) \$32,000 (\$588,000) \$200,000 (\$388,000) \$40,000 \$428,000 \$80,000 \$500,000 (\$480,000) (\$480,000) \$64,000 (\$316,000) \$40,000 (\$276,000) \$120,000 \$396,000 \$950,000 \$500,000 (\$720,000) (\$720,000) \$96,000 \$106,000 \$120,000 \$226,000 \$240,000 \$14,000 \$1,456,000 \$500,000 (\$720,000) (\$720,000) \$96,000 \$612,000 \$240,000 \$852,000 \$360,000 (\$492,000) \$0 \$640,000 \$0 \$640,000 \$640,000 \$0 \$80,000 \$560,000 \$560,000 \$0 \$560,000 \$0 1 2 3 4 5 6 7 8 9 Tax Loss Carry Forward Beginning Balance Loss for Year Application to Gain Ending Balance 1 \$0 \$0 \$0 \$0 CGS Pct 40% 7- 6(d) Spreadsheet shows part (a) solution. Column on right is for making Problem 6 adjustments. 9 10 11 13 14 15 12 16 Year Balance Sheet Cash Accounts receivable Inventory Net working capital Capital assets at cost less Accumulated Depreciation Net capital assets Total assets Accounts payable Total equity 0 1 2 3 4 \$200,000 \$40,000 \$240,000 \$80,000 \$328,000 \$2,500,000 \$800,000 \$3,200,000 \$3,560,000 \$32,000 \$3,528,000 \$120,000 \$720,000 \$240,000 \$984,000 \$2,500,000 \$1,600,000 \$2,400,000 \$3,480,000 \$96,000 \$3,384,000 \$240,000 \$1,440,000 \$480,000 \$1,968,000 \$2,500,000 \$2,400,000 \$1,600,000 \$3,760,000 \$192,000 \$3,568,000 \$360,000 \$2,160,000 \$720,000 \$2,952,000 \$2,500,000 \$3,200,000 \$800,000 \$4,040,000 \$288,000 \$3,752,000 \$200,000 \$4,000,000 \$4,000,000 \$4,200,000 \$4,200,000 Invent. Pct 10% Adj Growth Income Statement Sales Cost of goods sold Gross profit Cash operating expenses Depreciation expense Taxable income less loss carry forward Tax liability Net income \$800,000 \$320,000 \$480,000 \$620,000 \$800,000 (\$940,000) \$0 \$0 (\$940,000) \$2,400,000 \$960,000 \$1,440,000 \$860,000 \$800,000 (\$220,000) \$0 \$0 (\$220,000) \$4,800,000 \$1,920,000 \$2,880,000 \$1,220,000 \$800,000 \$860,000 \$860,000 \$0 \$860,000 Cash Flow Statement 17 Net Income 18 plus: Depreciation expense 19 less: Incr. in Accts. Receivable less: Incr. in Inventory plus: Incr. in Accts. Payable Operating Cash Flow Beginning case Interim ending cash Required ending cash New financing required (\$940,000) \$800,000 (\$240,000) (\$80,000) \$32,000 (\$428,000) \$200,000 (\$228,000) \$40,000 \$268,000 (\$220,000) \$800,000 (\$480,000) (\$160,000) \$64,000 \$4,000 \$40,000 \$44,000 \$120,000 \$76,000 \$860,000 \$800,000 (\$720,000) (\$240,000) \$96,000 \$796,000 \$120,000 \$916,000 \$240,000 (\$676,000) \$940,000 \$220,000 \$0 \$1,160,000 \$1,160,000 \$0 \$860,000 \$300,000 1 2 3 4 5 6 7 8 9 Tax Loss Carry Forward Beginning Balance Loss for Year Application to Gain Ending Balance 1 \$0 \$940,000 \$0 \$940,000 \$7,200,000 \$2,880,000 \$4,320,000 \$1,580,000 \$800,000 \$1,940,000 \$300,000 \$574,000 \$1,366,000 \$1,366,000 \$800,000 (\$720,000) (\$240,000) \$96,000 \$1,302,000 \$240,000 \$1,542,000 \$360,000 (\$1,182,000) \$300,000 \$0 \$300,000 \$0 CGS Pct 40% 7- 7 a. Based on midpoints of forecasts Period Assets Sales Net income Retention 0 \$2,000,000 \$1,600,000 \$320,000 \$150,000 1 \$2,150,000 \$1,720,000 \$344,000 \$161,250 2 \$2,311,250 \$1,849,000 \$369,800 \$173,344 3 \$2,484,594 \$1,987,675 \$397,535 \$186,345 4 \$2,670,938 \$2,136,751 \$427,350 \$200,320 5 \$2,871,259 \$2,297,007 \$459,401 \$215,344 Dividend/(Investment) \$170,000 \$182,750 \$196,456 \$211,190 \$227,030 \$244,057 b. All results at low end of forecast ranges Period Assets Sales Net income Retention 0 \$2,000,000 \$1,200,000 \$120,000 \$40,000 1 \$2,040,000 \$1,224,000 \$122,400 \$40,800 2 \$2,080,800 \$1,248,480 \$124,848 \$41,616 3 \$2,122,416 \$1,273,450 \$127,345 \$42,448 4 \$2,164,864 \$1,298,919 \$129,892 \$43,297 5 \$2,208,162 \$1,324,897 \$132,490 \$44,163 Dividend/(Investment) \$80,000 \$81,600 \$83,232 \$84,897 \$86,595 \$88,326 c. All results at high end of ranges Period Assets Sales Net income Retention \$0 \$2,000,000 \$2,000,000 \$600,000 \$260,000 \$1 \$2,260,000 \$2,260,000 \$678,000 \$293,800 \$2 \$2,553,800 \$2,553,800 \$766,140 \$331,994 \$3 \$2,885,794 \$2,885,794 \$865,738 \$375,153 \$4 \$3,260,947 \$3,260,947 \$978,284 \$423,923 \$5 \$3,684,870 \$3,684,870 \$1,105,461 \$479,033 Dividend/(Investment) \$340,000 \$384,200 \$434,146 \$490,585 \$554,361 \$626,428 d. Worst case in terms of financial needs Period Assets Sales Net income Retension \$0 \$2,000,000 \$2,000,000 \$200,000 \$260,000 \$1 \$2,260,000 \$2,260,000 \$226,000 \$293,800 \$2 \$2,553,800 \$2,553,800 \$255,380 \$331,994 \$3 \$2,885,794 \$2,885,794 \$288,579 \$375,153 \$4 \$3,260,947 \$3,260,947 \$326,095 \$423,923 \$5 \$3,684,870 \$3,684,870 \$368,487 \$479,033 Dividend/(Investment) (\$60,000) (\$67,800) (\$76,614) (\$86,574) (\$97,828) (\$110,546) 7- 9 Problem 7-9 under one set of specific assumptions Integrated Financial Statement Template Pro Forma Financial Statements 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 Beginning Period 1 Period 2 Period 3 Period 4 Period 5 Sales Forecast \$250,000 \$500,000 \$1,000,000 \$1,500,000 \$1,800,000 Income Statement Sales Revenue less: Cost of Goods Sold GROSS PROFIT less: Selling Expenses General and Administrative Expenses Depreciation Expense Other Operating Expenses Total Operating Expenses OPERATING PROFIT less: Interest and Other Expenses plus: Interest and Other Revenues PRE-TAX INCOME Income Tax NET INCOME \$250,000 \$62,500 \$187,500 \$30,000 \$117,500 \$120,000 \$0 \$267,500 (\$80,000) \$18,000 \$0 (\$98,000) (\$34,300) (\$63,700) \$500,000 \$125,000 \$375,000 \$60,000 \$135,000 \$144,000 \$0 \$339,000 \$36,000 \$28,346 \$0 \$7,655 \$2,679 \$4,975 \$1,000,000 \$250,000 \$750,000 \$120,000 \$170,000 \$292,800 \$0 \$582,800 \$167,200 \$86,510 \$0 \$80,690 \$28,241 \$52,448 \$1,500,000 \$375,000 \$1,125,000 \$180,000 \$205,000 \$471,360 \$0 \$856,360 \$268,640 \$145,015 \$0 \$123,625 \$43,269 \$80,356 \$1,800,000 \$450,000 \$1,350,000 \$216,000 \$226,000 \$637,632 \$0 \$1,079,632 \$270,368 \$179,408 \$0 \$90,960 \$31,836 \$59,124 Cash Flow Statement Net Income Depreciation Expense OPERATING CASH FLOW plus: Increase in Accounts Payable Increase in Other Payables less: Increases in Accounts Receivable Increase in Inventory OPERATING SOURCES (USES) OF CASH plus: Net Cash from Financing Activities less: Net Investment Outlays CHANGE IN CASH plus: Beginning Cash ENDING CASH BALANCE (\$63,700) \$120,000 \$56,300 \$5,000 \$3,125 \$50,000 \$9,375 \$5,050 \$114,950 \$120,000 \$0 \$50,000 \$50,000 \$4,975 \$144,000 \$148,975 \$5,000 \$3,125 \$50,000 \$9,375 \$97,725 \$646,275 \$744,000 \$0 \$50,000 \$50,000 \$52,448 \$292,800 \$345,248 \$10,000 \$6,250 \$100,000 \$18,750 \$242,748 \$650,052 \$892,800 \$0 \$50,000 \$50,000 \$80,356 \$471,360 \$551,716 \$10,000 \$6,250 \$100,000 \$18,750 \$449,216 \$382,144 \$831,360 \$0 \$50,000 \$50,000 \$59,124 \$637,632 \$696,756 \$6,000 \$3,750 \$60,000 \$11,250 \$635,256 \$434,376 \$1,069,632 \$0 \$50,000 \$50,000 \$50,000 \$50,000 \$9,375 \$109,375 \$600,000 \$709,375 \$50,000 \$100,000 \$18,750 \$168,750 \$1,200,000 \$1,368,750 \$50,000 \$200,000 \$37,500 \$287,500 \$1,800,000 \$2,087,500 \$50,000 \$300,000 \$56,250 \$406,250 \$2,160,000 \$2,566,250 \$50,000 \$360,000 \$67,500 \$477,500 \$2,592,000 \$3,069,500 \$5,000 \$0 \$3,125 \$0 \$0 \$8,125 \$314,950 \$323,075 \$450,000 (\$63,700) \$386,300 \$709,375 \$10,000 \$0 \$6,250 \$0 \$0 \$16,250 \$961,225 \$977,475 \$450,000 (\$58,725) \$391,275 \$1,368,750 \$20,000 \$0 \$12,500 \$0 \$0 \$32,500 \$1,611,276 \$1,643,776 \$450,000 (\$6,276) \$443,724 \$2,087,500 \$30,000 \$0 \$18,750 \$0 \$0 \$48,750 \$1,993,420 \$2,042,170 \$450,000 \$74,080 \$524,080 \$2,566,250 \$36,000 \$0 \$22,500 \$0 \$0 \$58,500 \$2,427,796 \$2,486,296 \$450,000 \$133,204 \$583,204 \$3,069,500 600000 120000 120000 1200000 144000 744000 1800000 292800 892800 Balance Sheet ASSETS Cash and Equivalents Accounts Receivable Inventory CURRENT ASSETS Net Fixed Assets TOTAL ASSETS LIABILITIES Accounts Payable Notes Payable Wages Payable Taxes Payable Current Portion of Long-Term Debt CURRENT LIABILITIES Long-Term Debt TOTAL LIABILITIES Common Stock (plugged new equity) Retained Earnings TOTAL EQUITY TOTAL LIABILITIES AND EQUITY \$50,000 \$50,000 \$600,000 \$650,000 \$0 \$200,000 \$200,000 \$450,000 \$0 \$450,000 \$650,000 Note: Cells with zeros are computed from other inputs. Required capital assets less depreciation plus new investment 1.20 600000 600000 2160000 471360 831360 2592000 637632 1069632 Period 6 \$2,160,000 ...
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