Refer to PA1-1.
PA1-1
Assume that you are the president of High Power Corporation. At the end of the first year of operations (December 31, 2013), the following financial data for the company are available:
Accounts Payable..................................... $32,100
Accounts Receivable.................................... 9,550
Cash....................................................... 13,300
Contributed Capital.................................... 59,090
Dividends.................................................. 1,950
Equipment............................................... 86,000
Notes Payable............................................. 1,160
Operating Expenses.................................... 58,700
Other Expenses........................................... 7,850
Sales Revenue...........................................90,000
Supplies....................................................5,000
Required:
1. Evaluate whether the company was profitable.
2. Evaluate whether the company could have paid a greater amount for dividends.
3. Evaluate whether the company is financed mainly by creditors or stockholders.
4. Determine the amount of cash increase or decrease that would be shown in the statement of cash flows.