Question

2.Berman & Jaccor Corporation's current sales and partial balance sheet are shown below.

This year

Sales                $          1,000  

Balance Sheet: Assets                                    

Cash                $          200     

Short-term investments                     $          135     

Accounts receivable               $          100     

Inventories                  $          200     

    Total current assets            $          635     

Net fixed assets                      $          450     

    Total assets             $          1,085  

Sales are expected to grow by 10% next year. Assuming no change in operations from this year to next year, what are the projected total operating assets? Do not round intermediate calculations. Round your answer to the nearest dollar.

$ __

3.Smiley Corporation's current sales and partial balance sheet are shown below.

This year

Sales               $          10,000

Balance Sheet: Liabilities                                           

Accounts payable                   $          2,000  

Notes payable             $          2,500  

Accruals                      $          1,400  

    Total current liabilities                    $          5,900  

Long-term bonds                    $          2,000  

    Total liabilities                     $          7,900  

Common stock                        $          1,500  

Retained earnings                   $          2,000  

    Total common equity                      $          3,500  

Total liabilities & equity                    $          11,400

Sales are expected to grow by 10% next year. Assuming no change in operations from this year to next year, what are the projected spontaneous liabilities? Do not round intermediate calculations. Round your answer to the nearest dollar.

$__

Answer 1

2)  total operating assets can be calculated using the following formula:-

= Cash+Accounts receivable+Inventories+Net fixed assets  

current year total operating assets is calculated as follows:-

current year total operating assets = 200+100+200+450 = 950

we are asuming that  total operating assets wil also grow with sales at 10%

so, projected total operating assets = 950*(1.10) = $1045

Note :- Short-term investments are not treated as operating asset.

3) total spontaneous liabilities is calculated using the following formula:-

= Accounts payable+ notes payable+Accruals

current year spontaneous liabilities = 2000+2500+1400 = 5900

we are asuming that the projected spontaneous liabilities wil also grow with sales at 10%

projected spontaneous liabilities = 5900*(1.10) = $6490