Question
Between January 28, 2021, and October 28, 2021, A Company achieved a saving position of $400,000 but experienced the following changes in its assets and
Between January 28, 2021, and October 28, 2021, A Company achieved a saving position of $400,000 but experienced the following changes in its assets and liabilities of interest. The company invested in $475,000 worth of renovations and purchases of new equipment at both its two facilities, sold $100,000 worth of another companys stocks and bought $50,000 worth of Canada savings bonds. It also decreased its bank deposits by $50,000 and had to pay off a short-term debt of $25,000 that had become due at the time.
Using the flow-of-funds equation:
(i) determine how much new borrowing the company might have contracted to achieve the stated changes in its financial position.
(ii) set up the company's flow-of-funds statements for the stated period in 2017
(iii) determine if the company was a net debtor or net creditor during the stated period and calculate by how much such an amount might have been.
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