Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sharon Feldman, president of Allied Company, considers $31,000 to be a minimum cash balance for operating purposes. As can be seen from the following statements,

Sharon Feldman, president of Allied Company, considers $31,000 to be a minimum cash balance for operating purposes. As can be seen from the following statements, only $26,000 in cash was available at the end of 2011. Because the company reported a large net income for the year, and also issued bonds and sold some long-term investments, the sharp decline in cash is puzzling to Ms. Feldman.

Allied Company Comparative Balance Sheet December 31, 2011, and 2010
2011 2010
Assets
Current assets:
Cash $ 26,000 $ 46,200
Accounts Receivable 213,200 224,300
Inventory 259,900 202,600
Prepaid expenses 14,700 28,200
Total current assets 513,800 501,300
Long-term investments 123,000 175,000
Plant and equipment 882,000 761,000
Less accumulated depreciation 215,500 193,300
Net plant and equipment 666,500 567,700
Total assets $ 1,303,300 $ 1,244,000
Liabilities and Stockholders' equity
Current liabilities:
Accounts payable $ 184,900 $ 242,100
Accrued liabilities 9,100 17,200
Income taxes payable 50,800 44,500
Total current liabilities 244,800 303,800
Bonds Payable 233,000 122,000
Total liabilities 477,800 425,800
Stockholders

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Reporting And Analysis

Authors: Michael Diamond, James Stice, Earl K. Stice, James D. Stice

5th Edition

0538873019, 978-0538873017

More Books

Students also viewed these Accounting questions

Question

What is the general form of a ???? statistic?

Answered: 1 week ago

Question

=+e. User: uses the item or service.11

Answered: 1 week ago