PLZ add explanation. Shown below is the balance sheet for Consolidated Metal Bas

Question

PLZ add explanation.

Shown below is the balance sheet for Consolidated Metal Bashers, on 30 September, 2010 Consolidated Metal Bashers, Balance Sheet as at 30 September, 2010 Management, 1265 Military Trail, Toronto, ON, MIC 1A4, Canada Page 11 MGTA04 Midtem October 20 (in S'000) ASSETS LIABILITIES Current Assets Cash Inventory Accounts Receivable Current Liabilities 5 Accounts Payable 20 20 30 Long Term Liabilities 40 Fixed Assets Furniture Machinery Bank Loan EQUITY Retained Earnings 10 45 Common Shares 20 10 TOTAL ASSETS 100 TOTAL LIABS. +EQUITY 100 Between 30 September, 2010 and 7 October, 2010 the Corporation completed a number of financial transactions. Specifically, Consolidated Metal bashers: Raised $20,000 by selling shares to new com Used 1/2 of the proceeds of the share sale to purchase a delivery van. Used $5,000 to buy more raw materials Put the rest of the proceeds into the bank. mon shareholders. 2. 3. 4.

Explanation / Answer

46.

Net working capital =current assets minus current liabilities.

Current assets increased by purchsing raw material (inventory) 5000 and depositing the cash in bank (Cash) 5000 so the net working capital = (10000 + 25000 + 20000) - (30000) = $25000

47.

Since the working capital incresed, along with same liabilities so the liquidity of the company increased.

48.

Leverage refers to the amount of borrowed money (debt) in the capital structue of the company . since more equity was issued and the amount of debt remains same so the leverage decreased.

Less leverage

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