SECTION 2 - PROBLEMS (12%) - Suggested time 60 minutes FOR THE PROBLEM QUESTIONS, YOU CAN USE WORD OR EXCEL TO PREPARE YOUR SOLUTIONS. AFTER YOU ARE DONE, PLEASE UPLOAD THEM TO MOODLE UNDER WEEK 10. INDICATE YOUR STUDENT NAME AND ID Problem 1 - Prepare Financial Statements (7%) Use the following information, to prepare ABC's 2012 financial statements (Statement of Income & Statement of Financial Position): Trade and other payable Trade receivables Accrued expenses Accumulated depreciation Administrative expenses Plant, property, and equipment Share capital Cash Cost of sales Depreciation Dividends Income tax expense Intangible assets Inventories Long-term borrowings Marketable securities Other expenses Other income Prepaid expenses Revenue Distribution costs Retained earnings (beginning) Short-term borrowings $ 80,000 150,000 100,000 550,000 250,000 2,350,000 930,000 525,000 3,000,000 55,000 50,000 170,000 165,000 35 000 som 450,000 610,000 10.00 60.000 55,000 40,000 30,000 4,000,000 250,000 1,000,000 $ 250,000 Propiem 2 - Working Capital Management (5%) 1) With the following information, calculate the company's DWC for 2012 and 2013. 2013 2012 $ 176,000 55,000 360,000 450,000 Profit for the year Depreciation/amortization Trade receivables Inventories Trade and other payables Revenue $ 225,000 70,000 385.000 490,000 400,000 440,000 2.500.000 2.200.000 2) Calculate the company's operating cash flows and CCE ratio for 2012 and 2013. Assume that in 2011 the company's net working capital was $350,000. 3) Bonus points (2%): Calculate the company's cash conversion cycle