Question

cir Caraway's currell HD (notes payable), what is the firm's net working capital? 7. A scrambled list of accounts from the income statement and balance sheet of Belmond, Inc. is found below Belmond, Ing. Balance Sheet 16.610 Cash 9.500 Belmond, Inc. Accounts Receivable Inventories 6.550 Income Statement Current Assets 32.66O $ Revenues 12,720 Buildings and Equipment 122,040 5,760 LOS: Accumulated Depreciation -34.120 Cost of Goods Sold 6,960 Not Piant and Equipment 87,020 Gross Profit Total Assets 120,670 1,380 Operating Expenses Depreciation Expense 520 Accounts Payable 4,850 General and Administrative Expense 860 Short-term Notes Payable 620 Current Liabilities 4,200 6,470 Net Operating Income Long-term Debt 55,260 870 Interest Expense Total Liabilities 60,730 Earnings before Taxes 3,330 Common Stock 45,080 Retained Earnings 1,400 Income Taxes 14.760 Owners' Equity Net Income 1,930 59,840 Total Liabilities and Owners' Equity 120,670

Answer 1

1
NET WORKING CAPITAL =current assets - current liabilities
= 32000-5470
= 26530
net working capital is greater indicate company has able to payment at time
2
INCOME STATEMENT
FOR THE YEAR ENDED ……
Particular	$
Revenue	12720
cost of good sold	5760
gross profit	6960
Operating expenses	1360
Depreciation expenses	520
General and A dminstrative expenses	860
Net operating income	4200
interest expenses	870
Earning before taxes	3330
Income taxes	1400
Net income	1930
Balance SHEET
Cash	$16,610
Account receivable	9500
inventories	6550
current assets	$32,660
Bulding and equipment	122040
Less : accumulated depreciation	-34120
Net plant and equipment	$87,920
total assets	120670
Account payable	4650
Short term notes payable	620
Current liabilities	5470
Long term debts	55260
Total liabilities	60730
Commom stock	45080
Retaining Earnings	14760
Owners equity	59840
Total liabilities and owners equity	120670
3
a.
current ratio =currant assets/ current liabilites
= 32650/5470
= 5.97:1
the company should maintain current ratioapproximately 2:1 ratio
so the copany should decrease current assets or increse current liabilities
b.
Quick ratio=cash+account receivable / current liabilities
=16610+9500/5470
= 4.77:1
quick ratio analyse the current assets quickly convert into cash