BUS333 -Week 3 Chapter 3 (Working with Finandial Statements); Chapter4 (Long-Ter

Question

BUS333 -Week 3 Chapter 3 (Working with Finandial Statements); Chapter4 (Long-Term Financial Planning For questions #7-18, 1efer to the following financial information for Gannon Insurance. YOU MUST SHOW ALL CALCULATIONS TO EARN CREDIT 2016 2017 BALANCE SHEETS Assets Cash Accounts Receivable 120,000 520.000 05 000 410.000 1,355,000 160.000 620.000 290,000 Total Assets 1,580,000 Liabilities and Equity: 350 io 500,000 50,000 455.000 375 000 625,000 75,000 505.000 1,580,000 Accounts Payable Long-tem Debt Common Stock Total Liabilities and Equity 1,355,000 INCOME STATEMENT Revenue Cost of Goods Sol General and Administrative 3,300,000 2.275.000 15,000 Eamings Before Interest and Taxes Pretax Nct Income Net Income 590,000 40.000 550,000 167 000 383,000 7. If Gannon projects that by the end of 2017, ?l was operating al 80% of capacity, what is its full level capacity of sales

Explanation / Answer

Calculation of full level capacity of Sales

Existing capacity level - 80%
Existing sales revenue-$35,00,000
Full level capacity-100%

So sales at full level capacity=
$35,00,000*100/80
=$43,75,000

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