From the income statement and balance sheet provided, looking for anwser for Q1 ,Q2, Q8 and Q9 (questions are listed on the right hand side)

PROBLEMS Consider the financial statements for Ace Inc. for questions 1 to 8: 1. Identify the sources of cash and uses of cash for each year. Create a sources and uses statement 2. Estimate the age of inventory for each year 3. Estimate the age of accounts receivable for each year 4. Estimate the age of accounts payable for each year. 5. Estimate the working capital gap for each year 6. Suppose year 2's days of inventory were reduced to Ace Inc. Income Statements ($000s) YearI Year 2 $250,000 $290,000 165,000 173,000 85,000 117,000 Selling & admin expenses 68,000 76,000 13,000 14,000 4,000 27,000 800 3,100 26,200 9,170 $2,015 S17,030 ommon dividend paid $%1,000 $1,000 Sales Cost of goods sold Gross margin Depreciation Operating income Interest expense Profit before tax Income tax (at 35%) Net income 7. Suppose year 2's days of receivables were reduced to 8. Suppose year 2's days of payables were increased to 9. What are the three methods by which a firm can 10. From a lender's (or an investor's) perspective, which 35. How much cash would be freed up? 35. How much cash would be freed up? 40. How much cash would be freed up? improve its working capital gap? is safer and why: commercial paper or banker's 900 1,085 acceptances? Ace Inc. Balance Sheets at December 31 (S000s) Year1 Year 2 $2,400 $2,800 30,000 32,000 18,000 20,000 50,400 54,800 Net property and equipment 20,000 24,000 $70,400 $78,800 $20,185 $12,555 14,000 16,000 34,185 28,555 22,000 20,000 14,215 30,245 Total liabilities and equity $70,400 $78,800 Cash Accounts receivable Inventories Total current assets Assets Total assets Notes payable: Bank Accounts payable Total current liabilities Long-term debt Common equity