FIN MAR 2015 WA 2
Course code: FIN-116-GS
Course name: Principles of Finance
Written Assignment 2
Chapter 9
Assignment problems Ch 9: 3, 8, 9, 11
3. Fill in the blanks (_______) with the correct entries.
Assets Liabilities and Stockholder’s Equity
Current assets Current liabilities
Cash 250,000 Accounts payable
Accounts receivable Notes payable to banks (1,340,000 less) Accrued wages _130,000 Allowance for doubtful accounts Taxes owed 100,000 Of $20,000) 1,320,000 Total current liabilities 1,250,000
Inventory 1,410,000 Long-term debt ________
Total current assets 2,980,000 Stockholders’ equity 1,000,000
Land ________ Preferred stock
Plant and equipment Common stock ($2,800,000 less ($1 par, 750,000 accumulated shares authorized, depreciation 700,000 outstanding ________ 690,000) 2,110,000 Retained earnings ________ Total stockholders’ equity 3,140,000
Total assets $5,390,000 Total liabilities and equity 4,390,000
8. Given the following information, compute the current and quick ratios:
Cash $100,000
Accounts receivable 357,000
Inventory 458,000
Current liabilities 498,000
Long-term debt 610,000
Equity 598,000
Current Ratio = 1.275
Current assets=
100000 + 357000 + 458000 + 598000 / 498000 = 1.84
Quick Ratio =
100000 + 357000 + 598000/498000 = 2.12
9. If a firm has sales of $25,689,000 a year, and the average collection period for the industry is 45 days, what should this firm’s accounts receivable be if the firm is comparable to the industry?
Average daily sales=$25,689,000\365=$70,380.82
$70,380.82*45=$3,167,136.98
Accounts receivable=$3,167,136.98
11. A firm with sales of $500,000 has average inventory of $200,000. The industry average for 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?
200,000x4=$800,000
800,000–500,000=300,000
300,000/4=75,000
Course name: Principles of Finance
Written Assignment 2
Chapter 9
Assignment problems Ch 9: 3, 8, 9, 11
3. Fill in the blanks (_______) with the correct entries.
Assets Liabilities and Stockholder’s Equity
Current assets Current liabilities
Cash 250,000 Accounts payable
Accounts receivable Notes payable to banks (1,340,000 less) Accrued wages _130,000 Allowance for doubtful accounts Taxes owed 100,000 Of $20,000) 1,320,000 Total current liabilities 1,250,000
Inventory 1,410,000 Long-term debt ________
Total current assets 2,980,000 Stockholders’ equity 1,000,000
Land ________ Preferred stock
Plant and equipment Common stock ($2,800,000 less ($1 par, 750,000 accumulated shares authorized, depreciation 700,000 outstanding ________ 690,000) 2,110,000 Retained earnings ________ Total stockholders’ equity 3,140,000
Total assets $5,390,000 Total liabilities and equity 4,390,000
8. Given the following information, compute the current and quick ratios:
Cash $100,000
Accounts receivable 357,000
Inventory 458,000
Current liabilities 498,000
Long-term debt 610,000
Equity 598,000
Current Ratio = 1.275
Current assets=
100000 + 357000 + 458000 + 598000 / 498000 = 1.84
Quick Ratio =
100000 + 357000 + 598000/498000 = 2.12
9. If a firm has sales of $25,689,000 a year, and the average collection period for the industry is 45 days, what should this firm’s accounts receivable be if the firm is comparable to the industry?
Average daily sales=$25,689,000\365=$70,380.82
$70,380.82*45=$3,167,136.98
Accounts receivable=$3,167,136.98
11. A firm with sales of $500,000 has average inventory of $200,000. The industry average for 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?
200,000x4=$800,000
800,000–500,000=300,000
300,000/4=75,000