Question

Value Added Inc. buys $1.5 million of sow’s ears at the beginning of January but does...

Value Added Inc. buys $1.5 million of sow’s ears at the beginning of January but does not pay the full price immediately. Instead, it agrees to pay $0.5 million right away and the rest of the bill in March. It processes the ears into silk purses, which it sells for $3.5 million in February. It only receives $1.5 million in advance. However, it will not collect payment on the sales until April.

  1. What is the firm’s net income in February?
  1. What is its net income in March?
  1. What is the firm’s net new investment in working capital in January?
  1. What is the firm’s cash flow in Jannuary?
  1. What is the firm’s cash flow in February?
  1. What is the cash flow in March?
  1. What is the cash flow in April?
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Value Added Inc. buys $4 million of sow's ears at the beginning of January but doesn't...
Value Added Inc. buys $4 million of sow's ears at the beginning of January but doesn't pay immediately. Instead, it agrees to pay the bill in March. It processes the ears into silk purses, which it sells for $5 million in February. However, it will not collect payment on the sales until April. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Enter your answers in thousands of...
Alex inc. buys 30 percent of Steinbart company on January 1, 2017 for $544,000. Equity method...
Alex inc. buys 30 percent of Steinbart company on January 1, 2017 for $544,000. Equity method is to be used. Steinbart's net assets on that date were $1.5 million. Any excess of cost over book value is attributable to a trade name with a 20 year remaining life. Steinbart immediately begins supplying inventory to Alex as follows: YEAR 2017 2018 Cost to Steinbart $123,000 145,530 Transfer Price $164,000 220,500 Amount held by Alex at Year end (at transfer price) 41,000...
The 2018 balance sheet of Speith’s Golf Shop, Inc., showed long-term debt of $3.5 million, and...
The 2018 balance sheet of Speith’s Golf Shop, Inc., showed long-term debt of $3.5 million, and the 2019 balance sheet showed long-term debt of $3.75 million. The 2019 income statement showed an interest expense of $160,000. The 2018 balance sheet showed $500,000 in the common stock account and $3.3 million in the additional paid-in surplus account. The 2019 balance sheet showed $540,000 and $3.5 million in the same two accounts, respectively. The company paid out $405,000 in cash dividends during...
The 2014 balance sheet of Jordan’s Golf Shop, Inc., showed long-term debt of $5.9 million, and...
The 2014 balance sheet of Jordan’s Golf Shop, Inc., showed long-term debt of $5.9 million, and the 2015 balance sheet showed long-term debt of $6.15 million. The 2015 income statement showed an interest expense of $200,000. The 2014 balance sheet showed $580,000 in the common stock account and $3.5 million in the additional paid-in surplus account. The 2015 balance sheet showed $620,000 and $3.9 million in the same two accounts, respectively. The company paid out $570,000 in cash dividends during...
The information given below is Bobcats Company’s beginning balance sheet, estimates and policies, and the partially...
The information given below is Bobcats Company’s beginning balance sheet, estimates and policies, and the partially completed Master Budget for January and February. Use the information to answer the 22 Multiple Choice Questions, each asking for a missing number from the Master Budget. Round all your computations to the nearest dollar. Sales are expected to be $80,900 in January, $100,900 in February, and $105,900 in March. All sales are on credit and it collects 20% of all sales in the...
Bill Sanders started a part-time consulting practice, Sanders Consulting Associates (SCA), on January 1, Year 1....
Bill Sanders started a part-time consulting practice, Sanders Consulting Associates (SCA), on January 1, Year 1. SCA experienced the following transactions during Year 1. It is now year-end and assume that these transactions are the only transactions the company has. Adjusting entries must be made at year-end. January 1                   Acquired $3,000 cash from issuing common stock. January 15                 Purchased $1,100 of supplies on account. February 20               Recognized $12,800 of consulting revenue for services provided on account. March...
The information given below is Bobcats Company’s beginning balance sheet, estimates and policies, and the partially...
The information given below is Bobcats Company’s beginning balance sheet, estimates and policies, and the partially completed Master Budget for January and February. Use the information to answer the 22 Multiple Choice Questions, each asking for a missing number from the Master Budget. Round all your computations to the nearest dollar. Sales are expected to be $80,900 in January, $100,900 in February, and $105,900 in March. All sales are on credit and it collects 20% of all sales in the...
16. Hootman Inc. expects $1.0 million of net income available to shareholders for next year. The...
16. Hootman Inc. expects $1.0 million of net income available to shareholders for next year. The company's optimal capital structure is 40% debt and 60% equity. The capital needs for next year are $1.5 million. If the firm uses a residual dividend policy, what will be the firm's dividend payout ratio for next year? a. 10%                                               b. 40% c. 70%                                          d. 90% 17. Bill plans to open a self serve grooming center in a storefront. The grooming equipment...
On January 1, 2007, Chain Corporation issued $5 million of 7% coupon bonds at par. The...
On January 1, 2007, Chain Corporation issued $5 million of 7% coupon bonds at par. The bonds mature in 20 years and pay interest semiannually on June 30 and December 31 of each year. On December 31, 2017, the market interest rate for bonds of similar risk was 14%, and the market value of Chain Corporation bonds (after the December 31 interest payment) was $3,146,052. Although the company’s books are not yet closed for the year, a preliminary estimate shows...
Wally’s Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012....
Wally’s Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows:   Cash $ 21,020 Unearned Revenue (35 units) $ 5,150      Accounts Receivable $ 12,050 Accounts Payable (Jan Rent) $ 2,900      Allowance for Doubtful Accounts $ (1,700) Notes Payable $ 14,000      Inventory (40 units) $ 3,400 Contributed Capital...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT