Change in net working capital calculation Samuels Manufacturing is considering the purchase of a new machine to replace one it believes is obsolete. The firm has total current assets of $929,000 and total current liabilities of $645,000. As a result of theproposed replacement, the following changes are anticipated in the levels of the current asset and current liability accounts noted.AccountAccrualsMarketable securitiesInventoriesAccounts payableNotes payableAccounts receivableCashChangea. The change in net working capital is $+ $45,0000- 18,000+88,0000+ 148,000+ 14,000a. Using the information given, calculate any change in net working capital that is expected to result from the proposed replacement action.(Round to the nearest dollar.)

Net working capital:Net working capital is a vital measure of a company’s liquidity and ability to…

Answered: Change in net working capital…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 61E

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DIRECTION: Use the problem in solving the following requirementsInspiration Company had trading and nontrading investments held throughout 2014 and 2015. The nontrading investments are measured at fair value through other comprehensive income. The investments had a cost of P3,000,000 for trading and P3,000,000 for nontrading. The investments had the following fair value at year-end: December 31, 2014 December 31, 2015Trading 4,000,000 3,800,000Nontrading 3,200,000 3,700,000Prepare all journal entries for 2014 and 2015
View Policies Current Attempt in Progress Bridgeport Company owns a trade name that was purchased in an acquisition of McClellan Company. The trade name has a book value of $ 3,500,000, but according to GAAP, it is assessed for impairment on an annual basis. To perform this impairment test, Bridgeport must estimate the fair value of the trade name. It has developed the following cash flow estimates related to the trade name based on internal information. Each cash flow estimate reflects Bridgeport's estimate of annual cash flows over the next 12 years. The trade name is assumed to have no salvage value after the 12 years. (Assume the cash flows occur at the end of each year.) Cash Flow Estimate Probability Assessment $380,500 20% 631,600 50% 768,800 30% Click here to view factor tables (a) What is the estimated fair value of the trade name? Bridgeport determines that the appropriate discount rate for this estimation is 12%. (Round factor values to 5 decimal places, e.g. 1.25124 and…
From the data below is calculate the gearing adjustment required under Current Cost Accounting Method : Opening Closing $ $ Convertible Debentures Bank Overdraft 200 240 120 160 Cash 20 60 Paid-up Share Capital Reserves 300 400 100 160 $ Cost of Sales Adjustment 40 Monetary Working Capital Adjustments 30 Depreciation Adjustment 10 Total of Adjustments 80
Horizontal Analysis The comparative temporary investments and inventory balances of a company follow: Current Year Previous Year Accounts payable $51,212 $43,400 Long-term debt 57,597 78,900 Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Amount of Change Increase/Decrease Percentage Accounts payable $fill in the blank fill in the blank fill in the blank Long-term debt $fill in the blank fill in the blank fill in the blank
Show the solution in good accounting form Orange Company’s ledger revealed the following account balances as of December 31, 2020: Unamortized discount on bonds payable P120,000; Organization costs P100,000; Losses in early years of company P450,000; Trademarks P750,000 Patents P150,000; Amount set up by BOD as goodwill P300,000. How much should be presented as intangible assets shown In the statement of financial position?
Calculate the market to book ratio ,debt equity ratio and retained income for the year. whats wrong with my answers kindly Answer 1. Market to book ratio = Market capitalisation/ Net book value = 243,000,000/1,750,000 = 138.85 Market capitalisation = MPS x No. of shares = 270 x 900,000 = 243,000,000 As the original cost of assets and depreciation is not given, we can assume that non-current assets as the net book value. Step 2 2. Debt/equity ratio = (Short term debt+Long term debt)/Shareholder's fund = (730,000+180,000)/(1,800,000+160,000) Debt-equity ratio = 910,000/1,960,000 = 0.464 Short term debt is payables in the ques, long term debt is the loan amount in the ques, and shareholders' fund = Share capital + Retained earnings Debt equity is less than 1 which means that it is a low levered company i.e. it has a low level of debt in comparison to equity. 3. Retained earning is given = 160,000
Question Robinson plc have decided that in order to make better investment appraisal decisions they need to re-calculate the company's cost of capital. The following information is extracted from the company's statement of financial position (balance sheet): £ (millions) Fixed assets: 890 Current assets: 370 Current liabilities: (220) Non-current liabilities: 5% Bonds (£100 par) redeemable in 7 years (160) 4% Irredeemable Bonds (£100 par) (190) Bank Loan (120) Share capital and reserves Ordinary Shares (nominal value 50p)___ 180 7% Preference shares (£1 nominal value) 100 Reserves 290 Additional information: The risk-free rate of return on short-dated government bonds is currently 3%. The market risk premium has been estimated at 7% and the company's beta is 1.5. The company's ordinary share price is £3 and the preference share price is £0.8. The irredeemable bonds are currently trading at a 5% discount to par value and the redeemable bonds are currently trading at £105. The rate of…
How should the company respond to the ongoing situation to mitigate risk of failing the working capital given the following financial ratio? 1. Liquidity ratio : current ratio: 2.61xquick ratio: 2.56cash ratio: 0.85 2. Accounts receivable turnover: 4.08Ave collection period: 89.46 days 3. Inventory turnover: 38.76ave age of inventory: 9.42 4. Average payable turnover: 1.04ave payment period: 350.96 Note: Their working capital is 22,887,683 Current asset (37,127,683) - current liabilities (14,260,065) = 22,887,683
The comparative temporary investments and inventory balances of a company follow: Current Year Previous Year Accounts payable $60,260 $46,000 Long-term debt 54,510 79,000 Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Amount of Change Increase/Decrease Percentage Accounts payable $fill in the blank 1 fill in the blank 3% Long-term debt $fill in the blank 4 fill in the blank 6%
irvestment in Harbor, Femur Co. had its own revenues of ($ 4,500,000) and expenses of ($ 3,000,000) for the year 2023. What is the noncontrolling interest in net income? [ egin{array}{1} ext { a } $ 150,000 \ ext { b. } $ 132,000 . \ ext { c. } $ 168,000 . \ext { d. } $ 160,000. \ ext { e. } $ 203,000. end{array}]
STEEL INDUSTRIES Statement of Financial Position December 31, 2020 Assets Current assets: Cash Marketable equity securities Accounts receivable, net 50,000 19,000 60,000 Inventory Treasury stock Total current assets 30,000 20,000 * 179,000 Required: Indicate your criticisms of the balance sheet and briefly explain the proper treatment of any item criticized. Plant assets: Land and buildings, net 160,000 Investments: Short-term investments 20,000 Other assets: Supplies Total assets 4,000 363,000 Liabilities and Shareholders' Equity Liabilities: P 123,000 Bonds payable P Accounts payable Wages payable Total liabilities 40,000 10,000 173,000 Shareholders' equity: Ordinary shares (P20 par, 20,000 shares authorized, 6,000 shares outstanding) Retained earnings 120,000 50,000 Redeemable preference shares Total Shareholders' Equity Total Liabilities and Shareholders' Equity 20,000 190,000 363,000
Net income for Inkaleb Inc. for 2020 includes the effect of the following transactions involving the sale of fixed assets. Asset Sales Price Cost Gain (Loss)X P20,000 P 80,000 P 10,000Y 25,000 150,000 (18,000)Purchases of fixed assets during 2020 amounted to P340,000. The Accumulated Depreciation account increased P40,000 during 2020. How much is the depreciation expense for 2020?

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