Problem 3-1 Balance Sheet (PLEASE SHOW CALCULATION) The assets of Dallas & Assoc
ID: 2696327 • Letter: P
Question
Problem 3-1
Balance Sheet
(PLEASE SHOW CALCULATION)
The assets of Dallas & Associates consist entirely of current assets and net plant and equipment. The firm has total assets of $3 million and net plant and equipment equals $2.5 million. It has notes payable of $145,000, long-term debt of $746,000, 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.
Explanation / Answer
What is the balance ofcurrent liabilitieson the firm's balance sheet?
$ 145,000
What is the amount of accounts payable and accruals on its balance sheet?
$ 0 stated in problem,
What is the firm's net working capital?
$ ca - cl = 500,000 - 145,000 = 355000
What is the firm's net operating working capital?
$ 500,000
What is the monetary difference between your answers in e & f
the fact that there are not any non interest bearing notes payable.
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