Question
Role of Working Capital Create Balance Sheet, Accrual Basis Income Statement and Cash Flow basis Income Statement using the following information Company Name: Smart Technologies
Role of Working Capital
Create Balance Sheet, Accrual Basis Income Statement and Cash Flow basis Income Statement using the following information Company Name: Smart Technologies Apr 1st, 2011 Raised total capital of $1,000 (70% Debt and 30% Equity) Invested $600 on PPE using cash Whenever production is happening, Depreciation expense is $60 Purchased Raw Materials on credit for $500; Payment term Net 45 Cost of Salaries and Wages are accrued ($200) and paid on the 1st of the following month.
Apr 30th, 2011 The total inventory is converted to Finished goods and Sold with a Gross Profit of $500 The total sales are on credit with payment fully due by May 30th $10 Interest on Debt is paid using cash on Apr 30th Tax is also paid on cash on Apr 30th. Corporate Tax rates 35% Develop Accrual basis Income Statement for Apr 30th Develop Balance Sheet as at Apr 1st, Apr 30th, May 1st, May 15th and May 31st Develop Cash Flow Basis Income Statement for Apr 30th and May 31st Comment on the firm's working capital strategy
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