Question

Following are financial statements for Sentec Inc., a distributor of electrical fixtures, for 2008, 2009, and 2010.
a. Prepare Sentec Inc.’s managerial balance sheets on December 31, 2008, 2009, and 2010.
b. Prepare Sentec’s cash-flow statements for 2009 and 2010 according to the direct method.
c. What accounts for the change in the firm’s net operating cash flow over the two-year period?
d. In 2010, firms in the same business sector as Sentec Inc. had an average collection period of thirty days, an average payment period of thirty-three days, and an inventory turnover of eight days. Suppose that Sentec Inc. had managed its operating cycle like the average firm in the sector. On December 31, 2010, what would its working capital requirement have been? Its net operating cash flow in year 2010?


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  • CreatedMarch 27, 2015
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