Question: Bruno Corp has decided to expand its operations The bookkeeper

Bruno Corp. has decided to expand its operations. The bookkeeper recently completed the following statement of financial position in order to obtain additional funds for expansion:
(a) Prepare a revised statement of financial position using the available information. Assume that the bank overdraft relates to a bank account held at a different bank than the account with the cash balance. Assume that the accumulated depreciation balance for the buildings is $ 160,000 and that the accumulated depreciation balance for the equipment is $105,000. The allowance for doubtful accounts has a balance of $ 17,000. T he pension obligation is considered a long-term liability.
*(b) 'What effect, if any, does the classification of the bank overdraft have on the working capital and current ratio of Bruno Corp.? 'What is the likely reason that the bank overdraft was given that particular classification?

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  • CreatedSeptember 18, 2015
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