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
A foreign company plans to clear several dozen acres of ecologically valuable mangrove swamp in Vietnam for the creation of a shrimp aquaculture facility. This decision will create

Chester & Wayne is a regional food distribution company. Mr. Chester, CEO, has asked your assistance in preparing cash-flow information for the last three months of this year. Sele

Example of Labour Remuneration Beneath a premium bonus scheme, workers obtained a guaranteed basic hourly minimum rate of pay in addition of a bonus of 50 percent of the time

Example B & B Mechanical Repairs is a small, family owned partnership that specialises in the servicing and repair of motor vehicles. The business employs three qualified mecha

Eagle Company is considering the purchase of an asset for $100,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year. Comput

Cost Classifications and Estimation Cost classification may be defined like 'the arrangement of cost items in a logical sequence having concern to their nature and reason to b

Gerona Company authorized the sale of $300,000 of 10%, 10-year debentures on January 1, 2008. Interest is payable on January 1 and July 1. The entire issue was sold on April 1, 200

How would I calculate the debt amortization for a bond issued at discount with a maturity of 12 years, market interest rate at issue 10% annually, 5% semi annually, and has a state

Hi, i need the solution manual for cost accounting managerial emphasis 12 edition

Weighted Average Method - Work in Progress While this method is employed, all costs of production are considered in assigning costs to inventory. The method puts together open