STEPHEN SUMMERS DESIGN STUDIO
Compute for the following:
1. Earnings Rate on Investment Funds
2. Borrowing Base Usage Percentage
Stephen Summers Design Studio Comparative Balance Sheets June 30, 2019 2019 2018 ASSETS Current Assets: Cash Accounts Receivable Inventories Prepaid Expenses Long-Term Investments Eyupinent, Nel Land TOTAL ASSETS 28,900,000 48.800.000 78,400,000 3.100.000 10,300,000 74,000,000 33.100.000 276,600,000 21,000,000 31,700,000 80,700,000 2.200.000 5,600,000 73,300,000 94,500,000 309,000,000 LIABILITIES and STOCKHOLDERS EQUITY Current liabilities: Notes Payable, Short-term ALLUunts Payable Income Tax Payable Accrued Liabilities Interest Payable Salaries and Wages Payable Long-Term Note Payable Share Capital Fetaired Earnings TOTAL LIABILITIES and STOCKHOLDERS EQUITY 14,000,000 29,400,000 13,200,000 3,700,000 3,400,000 1,000,000 47,200,000 59,400,000, 105.300000 19,000,000 40,400,000 14,400,000 9,400,000 2,400,000 4,400,000 94,000,000 52,000,non 73,000,000 276,600,000 309,000,000 Transaction data for the year ended June 30, 2019: a. Net income, P680,700 b. Depreciation expense on equipment, 133,900 C. Accrued dividends on investment 288,400 and net gain of P244,400. Additional information: The company is planning to expand for an alternative product. So, the manager would like to know how much available funding to start new lines of business under the company's borrowing arrangement. Under the terms of the loan, the borrowing base percentage for accounts receivable is 65%, 50% for inventory and 25% for fixed assets. Compute for the following: A) Earnings Rate on invested Funds B) Borrowing Base usage percentage Stephen Summers Design Studio Comparative Balance Sheets June 30, 2019 2019 2018 ASSETS Current Assets: Cash Accounts Receivable Inventories Prepaid Expenses Long-Term Investments Eyupinent, Nel Land TOTAL ASSETS 28,900,000 48.800.000 78,400,000 3.100.000 10,300,000 74,000,000 33.100.000 276,600,000 21,000,000 31,700,000 80,700,000 2.200.000 5,600,000 73,300,000 94,500,000 309,000,000 LIABILITIES and STOCKHOLDERS EQUITY Current liabilities: Notes Payable, Short-term ALLUunts Payable Income Tax Payable Accrued Liabilities Interest Payable Salaries and Wages Payable Long-Term Note Payable Share Capital Fetaired Earnings TOTAL LIABILITIES and STOCKHOLDERS EQUITY 14,000,000 29,400,000 13,200,000 3,700,000 3,400,000 1,000,000 47,200,000 59,400,000, 105.300000 19,000,000 40,400,000 14,400,000 9,400,000 2,400,000 4,400,000 94,000,000 52,000,non 73,000,000 276,600,000 309,000,000 Transaction data for the year ended June 30, 2019: a. Net income, P680,700 b. Depreciation expense on equipment, 133,900 C. Accrued dividends on investment 288,400 and net gain of P244,400. Additional information: The company is planning to expand for an alternative product. So, the manager would like to know how much available funding to start new lines of business under the company's borrowing arrangement. Under the terms of the loan, the borrowing base percentage for accounts receivable is 65%, 50% for inventory and 25% for fixed assets. Compute for the following: A) Earnings Rate on invested Funds B) Borrowing Base usage percentage
