Question

A scrambled list of accounts from the income statement and balance sheet of​ Belmond, Inc. is found​ here:  

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?

SHEET

Inventory	6,510
Common stock	45,100
Cash	16,590
Operating expenses	1,390
​Short-term notes payable	640
Interest expense	930
Depreciation expense	510
Sales	12,830
Accounts receivable	9,610
Accounts payable	4,770
​Long-term debt	55,270
Cost of goods sold	5,760
Buildings and equipment	121,560
Accumulated depreciation	34,020
Taxes	1,400
General and administrative expense	820
Retained earnings	​?

Answer 1

Net working capital = Current Asset - Current Liability

Current Asset = Inventory + Cash+ Account receivable

= 6510 + 16590 + 9610

= 32710

Current liability = Short term notes payable + Accounts payable

= 640 + 4770

= 5410

Net working capital = 32710 - 5410

= 27300

b )

Income statement
Sales	12830
Less Cost of good sold	5760
Gross Profit	7070
Less Operating expense	1390
General and Administrative expense	820
Depreciation expense	510
Operating profit	1390
Less Interest	930
Profit before tax	2030
Less Tax	1400
Net income	630

Balance sheet
Current Asset :
Inventory	6510
Cash	16590
Account receivable	9610
Total Current Asset		32710
Fixed Asset :
Building and equipment	121560
Less depreciation	510
Total Fixed assset		121050
Total Asset		153760
Liabilities :
Current liability :
Accounts payable	4770
Short-term notes payab	640
Total Current liability		5410
Long term liability :
Long term debt	55270
Long term liability :		55270
Total liabilities		60680
Shareholders equity :
Common stock	45100	45100
Retained earning =[ Total Asset - Total liability - Common stock]		47980
Total liability and shareholders equity		153760

c )  

• Current asset are $32710 , current liabilities are $5410 hence it has strong net wroking capital of $27300
• Cost of good sold is only 44.89 % of sales ,operating expense is 10% and interest expense is7.24% so it has managing it costs well
• Cash is higher than sales

financial statements are showed to be well managed and good financial condition