Question

BALANCE SHEET

The assets of Dallas & Associates consist entirely of current assets and net plant and equipment. The firm has total assets of $2.9 million and net plant and equipment equals $2.4 million. It has notes payable of $150,000, long-term debt of $752,000, 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.

1. What is the company's total debt?
     $
2. 
   
3. What is the amount of total liabilities and equity that appears on the firm's balance sheet?
   $  
4. 
   
5. What is the balance of current assets on the firm's balance sheet?
   $  
6. 
   
7. What is the balance of current liabilities on the firm's balance sheet?
   $  
8. 
   
9. 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.]
   $  
10. 
    
11. What is the firm's net working capital?
    $  
12. 
    
13. What is the firm's net operating working capital?
    $  
14. 
    
15. What is the monetary difference between your answers to part f and g?
    $   
    
    What does this difference indicate?
    -Select-The difference indicates Notes payable balanceThe difference indicates Accounts payable balanceThe difference indicates Current liabilities balance

Answer 1

	WORKSHEET:
	Total assets	2900000
	Net plant and equipment	2400000
	Notes payable	150000
	Long term debt	752000
	Total common equity	1450000
	Accounts payable+Accruals [2900000-150000-752000-1450000]	548000
	Total debt & stockholders' equity	2900000
a)	Total debt (150000+752000+548000)	1450000
b)	Total liabilities and equity	2900000
c)	Current assets = Total assets-Net plant and equipment = 2900000-2400000 =	500000
d)	Balance of current liabilities = 150000+548000 =	698000
e)	Accounts payable+Accruals [2900000-150000-752000-1450000]	548000
f)	Net working capital = 500000-698000 =	-198000
g)	Net operating working capital = 500000-548000 =	-48000
h)	Monetary difference = 198000-48000 =	150000
i)	Indicates Notes Payable