Working Capital Policies FIN/571 April 1‚ 2013 Jim Ciaramella | | | | Introduction Lawrence Sports is a 20 million dollar company that manufactures sports equipment. Mayo is a major customer of Lawrence Sport ’s and has defaulted on 80% of the payments for goods and services for the weeks of March 17-23‚ and March 24-30 and Lawrence can’t expect any money from mayo until weeks April 14-20. Lawrence has borrowed money from
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CHAPTER 13 Financial Statement Analysis OVERVIEW OF EXERCISES‚ PROBLEMS‚ AND CASES Estimated Time in Learning Outcomes Exercises Minutes Level 1. Explain the various limitations and considerations in financial statement analysis. 2. Use comparative financial statements to analyze a company 12* 45 Mod over time (horizontal analysis). 13* 30 Mod 3. Use common-size financial statements to compare various 12* 45 Mod financial statement items (vertical analysis)
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(KidKare‚ Inc. 2011) | | |General Journal | | |G15 | |Date |Account Titles & Explanations |Ref |Debit |Credit | |Dec30 |Childcare Exp. |410 |
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Background Horniman Horticulture is a wholesale nursery company‚ which was purchased by the browns couples from Maggie’s father at $999‚000. The nursery’s operations filled 52 greenhouses and 40 acres of productive fields and employed 12 full-time and 15 seasonal employees. Sales were primarily to retail nurseries throughout the mid-Atlantic region. The company specialized in such woody shrubs as azaleas‚ camellias‚ hydrangeas‚ and rhododen-drons‚ but also grew and sold a wide variety of annuals
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SOLUTIONS FOR MULTIPLE‑CHOICE QUESTIONS 6.24 a. Correct Risk is high when the company always estimates the inventory but never takes a complete physical count. b. Incorrect Risk is low when the petty cash box is always locked in the desk of the custodian. c. Incorrect Risk is low when management has published a company code of ethics and sends frequent communication newsletters about it. d. Incorrect Risk is low when the board of directors reviews and approves all investment transactions. 6.25
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June 30 by $31‚677. This could be the result of the company making sales for cash or making purchases on credit which would explain the increase in accounts payable. Also‚ payments of insurance were credited from prepaid insurance resulting in no cash being removed from the account. 2. Accounts Receivable: There is an increase in accounts receivable as of June 30 by $4‚707. This could be the result of the company making sales on credit. 3. Supplies on hand: There is an increase in supplies
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TABLE OF CONTENT 1. MERCHANDISING BUSINESS a. Examples b. New Account on Income Statement c. Income Statement of Merchandising Business 2. DIFFERENCE: MERCHANDISING‚ MANUFACTURING & SERVICE RENDERING BUSINESS a. Service Business b. Merchandise Business c. Manufacturing Business 3. RECORDING SYSTEM OF MERCHANDISING BUSINESS a. Perpetual Inventory System i. Journal Entries 1. Purchases 2. Sales 3. Inventory Shrinkage Loss b. Periodic Inventory System i. Journal Entries 1. Purchases
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well as its traditional commercial freight delivery. DOP has also introduced and Electronic Data Interchange (EDI) in order to ease data and payment transfer from and to customers as well as building a customer website that acts as an order and account interface for its customers. 2.1 People/Key Players John Malone General Manager Melissa Dunhill Controller Tim Cunningham Director of Operations Wilbur Smith Site Manager Hazel Nutley Data Entry Operator 2.2 Chronology
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probably also requires an investment in current assets less current liabilities (working capital). There may be an increase in raw material‚ work-in-process‚ and finished goods inventories. Also‚ if there are sales on credit rather than cash‚ accounts receivable will increase; that is‚ sales per the income statement will be collected with a
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Gross profit 30‚160 Expenses 10‚000 Net Profit 20‚160 Profit/loss ratio x 40% 8‚064 Balance of investment in JV P88‚064 6-5: a Cash P190‚000 Merchandise inventory 29‚360 Accounts receivable 150‚800 Total assets 370‚160 Sweet Co’s‚ proportionate interest x 60% Sweet Company’s share in total asset P222‚096 6-6: a Sales 7‚200 Cost of sales Purchases P10‚000 Merchandise inventory
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