1.) The assets of Dallas & Associates consist entirely of current assets and net plant and equipment. The firm has total assets of $2.5 million and net plant and equipment equals $2 million. It has notes payable of $150,000, long-term debt of $750,000 and total common equity of $1.5 million. The firm does not have accounts payable and accruals on its balance sheet. The firm only finances with debt and common equity, so it has not preferred stock on its balance sheet.

a. What is the amount of total liabilities and equity that appears on the firms balance sheet?

b. What is the balance of current assets on the firms balance sheet?

c. What is the balance of current liabilities on the firms balance sheet?

d. What is the amount of accounts payable and accruals on its balance sheet? (Hint: Consider this as a single line item on the firms balance sheet).

e. What is the firms net working capital?

f. What is the firms net operating capital?

g. What is the explanation for the difference in your answers to parts f and g?