Question

I need help with chapter 3 page 90 1a-h I have answered a-e stuck on f g h can someone help with this

Problems Easy Problems BALANCE SHEET The assets of Dallas & Associates consist entirely of current a plant and equipment. The firm has total assets of $2.5 million 525 million and net plant and equip $2 million. It has notes payable of $150,000, long-term debt of $750,000, and total co of $1.5 million. The firm does have accounts payable and accruals on its balance she only finances with debt and common equity, so it has no preferred stock on its balas 1-8 et assets and the equipment tal common en • sheet. Theo is balance shee. e firm's balance a. What is the company's total debt? b. What is the amount of total liabilities and equity that appears on the firm's ball sheet? c. What is the balance of current assets on the firm's balance sheet? d. What is the balance of current liabilities on the firm's balance sheet? e. 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.) f. What is the firm's net working capital? 8. What is the firm's net operating working capital? h. What is the explanation for the difference in your answers to parts f and g?! INCOME STATEMENT Byron Books Inc. recently reported $13 million of net income Its EBIT was $20.8 million, and its tax rate was 35%. What was its interest expense? 3-2 ined earnings 144700000 out 962, 409, og med 9,41 201

Answer 1

As asked for

f . Net working capital = Current assets - Current liabilities = 500,000 - 100,000 - 150,000 = 250,000

g. Net Operating working capital = Current assets - Accounts payable and accruals = 500,000 -150,000 = 350,000

h. For net working capital notes payable is considered but for operating working capital it is not considered. The reason being notes payable usually is not payable on demand as other accounts payable. Hence it is not considered as a part of operating capital.