Calculated the net working capital, Cost Accounting

                                    Balance Sheet

                                                                     2010               2011           

Assets

Cash                                                              $166,800       $151,000      

Prepaid expenses                                            81,000            73,000           

Accounts receivable                                        19,500            45,000       

Inventory                                                      19,300            30,000       

Long term investment                                     15,000            35,000       

Capital assets                                                461,500          480,000       

Accumulated amortization                              (101,500)      (105,000)        

Total Assets                                                  $661,600       $709,000

Liabilities and Shareholders' Equity

Accounts payable                                          $37,100          $55,000    

Accrued wages                                               15,000          25,000        

Mortgage payable                                          232,000         232,000       

Common shares                                            273,000          273,000       

Retained earnings                                         104,500         181,000       

Total liabilities and shareholders' equity         $661,600       $709,000

Other information:

Sales                                                          1,895,080     2,018,395

Net Income                                                 530,000         612,000

Amortization                                               65,000           65,000

Required

a) Calculated the net working capital for 2010 and 2011

b) Calculate the days of working capital for 2010 and 2011

c) Calculate the companies cash conversion ratio for 2011

d) The company is considering changing its credit policy from net 30 to net 60 days.   The company wants to maintain a return on assets of at least 15%.  Would you recommend the change?

Provided below is information on 2011 operating results hypothetically altered to what would happen under the new policy.

Sales                                                            2,300,000

Net Income                                                   650,000

Accounts receivable                                       105,000

Total assets                                                   789,000

e) The company's current annual purchases are 1,000,000, and current purchasing policy is 30 days.  How much cash would it generate if it negotiated a 40 day policy?

Posted Date: 3/8/2013 4:03:38 AM | Location : United States







Related Discussions:- Calculated the net working capital, Assignment Help, Ask Question on Calculated the net working capital, Get Answer, Expert's Help, Calculated the net working capital Discussions

Write discussion on Calculated the net working capital
Your posts are moderated
Related Questions
Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4 Variable costs are those

Most corporations pay quarterly dividends on their common stock rather than annual dividends. Barring any unusual circumstances during the year, the board raises, lowers, or mainta

what are the examples of factory overhead

Determine the Absorption Rate of Overheads The budgeted production overheads and other budgeted data of compute are given as: Budget Overhead cost for the period = Ks

Use a selected company or your current work environment to identify at least one cost or expense that would fit under each of the following categories: • Variable • Fixed • Mixed •

(i) In terms of cashflow, which month will be the most costly for your project? (ii) If the 3rd and 4th months are more expensive by 25% each because the outsourced labour took

Partner A (50%) Partner B (50%) sharing profits equally New partner introduced $13,000 total cash including $3000 as goodwill which is raised to its full value. Partner C

Go the Hershey website to learn how to make Hershey chocolate. Review the process and take a look at some of the videos. Pay particular attention to the process steps of milling an

Devprop Leasing Co.is an industrial property development company, that typically develops warehouse and industrial complexes in new or underdeveloped areas, operates these complexe

Given the below information, what are the values for COGS and ending inventory for each costing method below?   Number of Units Price per Unit