Question
Bradburn Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one
Bradburn Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Bradburn and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2015, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $35,760 notes, which are due on June 30, 2015, and September 30, 2015. Another note of $6,250 is due on March 31, 2016, but he expects no difficulty in paying this note on its due date. Brown explained that Bradburns cash flow problems are due primarily to the companys desire to finance a $312,100 plant expansion over the next 2 fiscal years through internally generated funds.
The commercial loan officer of Topeka National Bank requested financial reports for the last 2 fiscal years. BRADBURN CORPORATION BALANCE SHEET MARCH 31 Assets Cash Notes receivable Accounts receivable (net) Inventories (at cost) Plant & equipment (net of depreciation) 2015 2014 $19,280 149,970 135,310 107,540 1,469,100 $1,881,200 $12,760 133,470 127,160 51,770 1,426,000 $1,751,160 Total assets Liabilities and Owners' Equity Accounts payable Notes payable Accrued liabilities Common stock (130,000 shares, $10 par) Retained earningsa $80,490 77,770 32,720 1,300,000 390,220 $1,881,200 $91,910 62,790 13,710 1,300,000 282,750 $1,751,160 Total liabilities and stockholders' equity aCash dividends were paid at the rate of $1 per share in fiscal year 2014 and $2 per share in fiscal year 2015Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started