((PLEASE SHOW ALL WORK AND FORMULAS)) ((PLEASE SHOW ALL WORK AND FORMULAS)) 14)
ID: 2813270 • Letter: #
Question
((PLEASE SHOW ALL WORK AND FORMULAS))
((PLEASE SHOW ALL WORK AND FORMULAS))
14) From the following balance sheet accounts, a) Construct a balance sheet for 2013 and 2014 b) List all the working capital accounts c) Find the net working capital for the years ending 2013 and 2014 d) Calculate the change in net working capital for the year 2014 Account Accounts payable Accounts receivable Cash Common stock Inventory Long-term debt Notes payable Plant Retained earnin Balance 12/31/2013 $1000 $2480 $1300 $4990 $5800 $7800 $ 800 $6380 $1370 Balance 12/31/2014 $1100 $2690 $1090 $4990 S6030 $8200 $ 960 $6530 $1090 and equipmentExplanation / Answer
a)
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Balancesheet
December 31,2013 and December 31,2014
b) List of working capital accounts
Working capital is the money available for the entity to its day to day operations. Working capital accounts for the given entity are
c) Calculation of net working capital
Net Working Capital = Current Assets - Current Liabilities
Net Working Capital for 2013 = 9580-1800
= $7,780
Net Working Capital for 2014 = 9810-2060
= $7,750
d)Calculation of changes in net working capital for the year 2014
The changes in net working capital happens when;
Change in working capital = Change in current assets - Change in current liabilities
Change in current assets (current assets in 2013 - current assets in 2014) comprises of
Change in current liabilities comprises of
Change in working capital = -230+260
= 30
12/31/2013 12/31/2014 Assets Cash 1,300 1,090 Accounts Receivable 2,480 2,690 Inventory 5,800 6,030 Total Current Assets 9,580 9,810 Net Fixed Assets 6,380 6,530 Total Assets 15,960 16,340 Liabilities Accounts Payable 1,000 1,100 S.T notes Payable 800 960 Total Current Liabilities 1,800 2,060 L.T.Debt 7,800 8,200 Retained Earnings 1370 1,090 Common stock 4,990 4,990 Total owner's equity 6,360 6,080 Total Liabilities & Equity 15,960 16,340Related Questions
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