Question
In: Finance
A firm’s pro forma balance sheet for June 2022 shows thefollowing:Total Assets, except for...
A firm’s pro forma balance sheet for June 2022 shows the following:
Total Assets, except for Cash and Marketable Securities, equal $1,000,000.
Total Liabilities and Equity, except for Notes Payable, equal $1,100,000.
Assume that the firm has a $50,000 Minimum Cash Balance policy.
What should the balance in Notes Payable equal?
| a. | $150,000 | |
| b. | $50,000 | |
| c. | zero | |
| d. | $100,000 |
Solutions
Expert Solution
As we know, the total of Assets side and the total of Liabilities and Equity side are always equal. It implies that the amount of cash must be more than $ 100,000 so as to make both sides of the balance sheet equal. This implies that the amount of notes payable shall be more than $ 100,000.
So, the correct answer is option a i.e. $ 150,000
jeff jeffy answered 2 years agoRelated Solutions
A firm’s pro forma balance sheet for June 2022 shows the following: Total Assets, except for...
A firm’s pro forma balance sheet for June 2022 shows the
following:
Total Assets, except for Cash and Marketable Securities, equal
$1,000,000.
Total Liabilities and Equity, except for Notes Payable, equal
$1,100,000.
Assume that the firm has a $50,000 Minimum Cash Balance
policy.
What should the balance in Cash and Marketable Securities
equal?
a.
$150,000
b.
$50,000
c.
zero
d.
$100,000
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