Question

You are evaluating the balance sheet for National Nut Company. From the balance sheet you find the following balances: Cash and marketable securities = $34,800, Accounts receivable = $118,600, Inventory = $208,700, Fixed plant and equipment = $400,000, Accrued wages and taxes = $58,600, Accounts payable = $96,100, notes payable (short-term) = $135,000 and long-term debt = $255,000. Calculate net working capital for National Nut Company. (Note: Like many questions on the assignment, not all of the information listed is necessary to find the solution.) A. less than $52,000

B. more than $52,000 but less than $70,000

C. more than $70,000 but less than $88,000

D. more than $88,000 but less than $106,000

E. more than $106,000

5. Worthwhile Wares, Inc. began the year 2014 with $13.4 million in retained earnings. The firm suffered a net loss of $2.1 million in 2012 and yet paid $1.2 million to its preferred stockholders and $2.5 million to its common stockholders. What is the year-end 2014 balance in retained earnings for Worthwhile Wares? A. $7.6 million

B. $9.7 million C. $10.9 million

D. $13.4 million

E. $15.0 million

6. In 2016, Creative Cake Shop had cash flows from operations of $275,000 and cash flows from financing activities of $250,000. The balance in the firm's cash account was $80,000 at the beginning of 2014 and $65,000 at the end of the year. What was Creative Cake Shop's cash flow from investing activities for 2014? A. $415,000

B. $–510,000

C. $–525,000

D. $–530,000

E. $–540,000

7. Sweet Pecans, Inc. has total assets of $380,000 of which $120,000 are current assets. Cash makes up 20 percent of the current assets and accounts receivable makes up another 15 percent of current assets. Sweet Pecan’s gross plant and equipment has a book value of $215,000 and other long-term assets have a book value of $100,000. What is the balance of depreciation on the balance sheet for Sweet Pecans?

A. $25,000

B. $40,000 C. $50,000

D. $55,000

E. $75,000

8. In 2016, a firm had cash flows from financing activities of – $50,000 and cash flows from investing activities of – $225,000. The balance in the firm's cash account was $80,000 at the beginning of 2012 and $95,000 at the end of the year. What was the firm’s cash flow from operations for 2016? A. $ 15,000

B. $ 95,000

C. $275,000

D. $290,000

E. $370,000

Answer 1

Answer to Question 4:

Current Assets = Cash and Marketable Securities + Accounts Receivable + Inventory
Current Assets = $34,800 + $118,600 + $208,700
Current Assets = $362,100

Current Liabilities = Accrued Wages and Taxes + Accounts Payable + Notes Payable
Current Liabilities = $58,600 + $96,100 + $135,000
Current Liabilities = $289,700

Net Working Capital = Current Assets - Current Liabilities
Net Working Capital = $362,100 - $289,700
Net Working Capital = $72,400

Net working capital is more than $70,000 but less than $88,000.

Answer to Question 5:

Ending Retained Earnings = Beginning Retained Earnings - Net Loss - Dividend Paid to Preferred Stockholders - Dividend Paid to Common Stockholders
Ending Retained Earnings = $13.40 million - $2.10 million - $1.20 million - $2.50 million
Ending Retained Earnings = $7.60 million

Answer to Question 6:

Change in Cash = Ending Cash - Beginning Cash
Change in Cash = $65,000 - $80,000
Change in Cash = -$15,000

Change in Cash = Cash Flows from Operations + Cash Flows from Investing Activities + Cash Flows from Financing Activities
-$15,000 = $275,000 + Cash Flows from Investing Activities + $250,000
Cash Flows from Investing Activities = -$540,000

Answer to Question 7:

Total Assets = Current Assets + Net Plant and Equipment + Long-term Assets
$380,000 = $120,000 + Net Plant and Equipment + $100,000
Net Plant and Equipment = $160,000

Net Plant and Equipment = Gross Plant and Equipment - Accumulated Depreciation
$160,000 = $215,000 - Accumulated Depreciation
Accumulated Depreciation = $55,000

Answer to Question 8:

Change in Cash = Ending Cash - Beginning Cash
Change in Cash = $95,000 - $80,000
Change in Cash = $15,000

Change in Cash = Cash Flows from Operations + Cash Flows from Investing Activities + Cash Flows from Financing Activities
$15,000 = Cash Flows from Operations - $225,000 - $50,000
Cash Flows from Operations = $290,000