Question

P3-12 (similar to) (Related to Checkpoint 3.2) (Review of financial statements) A scrambled list of accounts from the income statement and balance sheet of Belmond, Inc. is four here: EE! a. How much is the firm's net working capital? b. Complete an income statement and a balance sheet for Belmond. c. If you were asked to respond to parts (a) and (b) as part of a training exercise, what could you tell your boss about the company's financial condition based on your answers? a. How much is the firm's net working capital? The firm's networking capital is $ (Round to the nearest dollar.) Qui Enter your answer in the answer box and then click Check Answer 4 parts remaining CA

Answer 1

Blalance Sheet Income statement Sales Less: Cost of goods sold Gross profit Less: Operating expense Depreciation expense Operating income Less: Interest expense Net income 12,800 5,710 7,090 1,310 460 5,320 900 4,420 Asset Current asset: Inventory Cash Accounts receivable Total current asset 6,540 16,550 9,580 32,670 $ 76,990 109,660 Total Fixed asset Total Asset Liabilities Current liabilities Short-term notes payable Accounts payable Total Current liabilities 640 4,750 5,390 Non-Current liabilities Long term debt 54,860 Shareholders' equity Common stock Net income Total Shareholders' equity Total Liabilities 44,990 4,420 49,410 109,660 Net working capital = Total current asset - Total current liabilities=32670-5390 = $27,280 The company's current assets are more than double its current liabilities. This means its liquidity position is sound. Also the porfitibiliy is satisfactory. The long term debt is more than its equity. This means the company is depending too much on outside funds.