Question

(Review of financial​ statements)  A scrambled list of accounts from the income statement and balance sheet of​ Belmond, Inc. is found​ here:

Inventory Common stock Cash Operating expenses Short-term notes payable Interest expense Depreciation expense Sales Accounts receivable Accounts payable Long-term debt Cost of goods sold Buildings and equipment Accumulated depreciation Taxes General and administrative expense Retained earnings 6,550 45,070 16,600 1,350 640 940 510 12,830 9,570 4,790 55,200 5,780 122,310 34,260 1,410 820

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a.  How much is the​ firm's net working​ capital?

b.  Complete an income statement and a balance sheet for Belmond.

c. If you were asked to respond to parts (a​)and (b​) as part of a training​ exercise, what could you tell your boss about the​ company's financial condition based on your​ answers?

Answer 1

Belmond, Inc. Balance Sheet As at .... a. Net working capital = current assets-current debt = 32720 - 5430 = 27290 Assets Cash Accounts receivable Inventory Total current assets 16600 9570 6550 32720 Company's Current assets are quite impressive to handle Company's current liabilities. 122310 -34260 Buildings and equipment Accumulated Depreciation Net buildings and equipment Total assets Debt Equity ratio = 60630 / 60140 = 1.008 The company is debt oriented showing it to be a very risky capital combination. 120770 Liabilities & Equity Liabilities Notes payable Accounts payable Total current liabilities Long-term debt Total liabilities 640 4790 5430 55200 60630 Equity Common stock Retained earnings Total equity Total liabilities and equity 45070 15070 60140 120770 12830 5780 7050 Income Statement For the period ending .... Sales Cost of goods sold Gross profits General & admin expense Depreciation expense Total operating expense Operating income (EBIT) Interest expense Earnings before taxes Taxes Net income 820 510 1330 5720 940 4780 1410 3370