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The assets of Dallas & Associates consist entirely of current assets and net pla

ID: 2800003 • Letter: T

Question

The assets of Dallas & Associates consist entirely of current assets and net plant and equipment. The firm has total assets of $2.6 million and net plant and equipment equals $2.3 million. It has notes payable of $140,000, long-term debt of $748,000, 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.

What is the company's total debt?

$ ________

What is the amount of total liabilities and equity that appears on the firm's balance sheet?

$ ________

What is the balance of current assets on the firm's balance sheet?

$ ________

What is the balance of current liabilities on the firm's balance sheet?

$ _________

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.]

$ _________

What is the firm's net working capital?

$ ________

What is the firm's net operating working capital?

$ ________

What is the monetary difference between your answers to part f and g?

$ _________

Explanation / Answer

Current assets 300000 Net plant and equipment 2300000 Total assets 2600000 Accounts payable and accruals 262000 Notes payable 140000 Total current liabilities 402000 Long term debt 748000 Total debt 1150000 Total common equity 1450000 Total liabilities & Stockholders' equity 2600000 Companies total debt 1150000 Current assets 300000 Current liabilities 402000 Accounts payable and accruals 262000 Net working capital= 300000-402000 = -102000 Net operating working capital =300000-262000 = 38000 Monetary difference = 140000 (Notes payable)

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