BALANCE SHEET The assets of Dallas & Associates consist entirely of current assets and net plant...

BALANCE SHEET

The assets of Dallas & Associates consist entirely of current assets and net plant and equipment. The firm has total assets of $2.6 million and net plant and equipment equals $2.2 million. It has notes payable of $140,000, long-term debt of $755,000, and total common equity of $1.45 million. The firm does have accounts payable and accruals on its balance sheet. The firm only finances with debt and common equity, so it has no preferred stock on its balance sheet.

Write out your answers completely. For example, 25 million should be entered as 25,000,000. Enter negative amounts, if any, with a minus sign.

What is the company's total debt?
$
What is the amount of total liabilities and equity that appears on the firm's balance sheet?
$
What is the balance of current assets on the firm's balance sheet?
$
What is the balance of current liabilities on the firm's balance sheet?
$
What is the amount of accounts payable and accruals on its balance sheet? [Hint: Consider this as a single line item on the firm's balance sheet.]
$
What is the firm's net working capital?
$
What is the firm's net operating working capital?
$
What is the monetary difference between your answers to part f and g?
$

What does this difference indicate?

Solutions

Expert Solution

Conslidated Balance sheet of Dallas & Associates

	Assets		Liabilities
	$		$
Non-Current Assets		Non Current Liabilties
Plant & Equipment	2200000	Equity	1450000
		Long-Term Debt	755000
*Current Asset( Balancing Figure)**	400000	Current Liabilities
		Notes Payable	140000
		Acconts Payable & Accruals(Balancing Figure)	255000
Total Assets	2600000	Total Liabilities	2600000

*Current Assets= Total Assets - Non current assets

a) Total Debt = Long Term Debt+Notes payable + current liabilities

= 755000+140000+255000

= $1150000

b) Total Liabilities = Current Liabilities+ Non Cuurent Liabilites

= 395000+2205000

=$2600000

c)By looking at the balance sheet

Current Assets= Total Assets - Non current assets

= 2600000- 2200000

=$400000

d)Balance of current liabilities= Total Assets - (Equity+ Notes Payable+Long Term Debt)

= 2600000- (1450000+755000+140000)

=2600000-2345000

=$255000

jeff jeffy answered 1 year ago

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