4. (20 points) Balance Sheet of the Green Co. for the end of 2020 year is...
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4. (20 points) Balance Sheet of the Green Co. for the end of 2020 year is given below. Company is planning on making a profit of $120,000 in year 2021. Assume that the operations of the company will unfold in such a way to keep the short term assets and the liabilities accounts the same at the end of year 2021. If Green Co. wants to keep its Net Working Capital as before and does not want to buy any fixed assets, what are the options open to the company given that there will be no dividends distributed in 2021. Please clearly state your assumptions and provide the projected Balance Sheet for the end of 2021. ASSETS Current assets Cash and cash equivalents Accounts receivable Inventory Prepaid expense Investments Total current assets Property and equipment Land Buildings and improvements Equipment Less accumulated depreciation Other assets Intangible assets Less accumulated amortization Total assets $ 100,000 20,000 15,000 4,000 10,000 149,000 24,300 250,000 50,000 (5,000) 4,000 (200) $ 472,100 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable Notes payable Accrued expenses Deferred revenue Total current liabilities Long-term debt Total liabilities $ 30,000 10,000 5,000 2,000 47,000 200,000 247,000 Shareholders' Equity Common stock 10,000 Additional paid-in capital 20,000 Retained earnings 197,100 Treasury stock (2,000) Total liabilities and shareholders' equity $ 472,100 4. (20 points) Balance Sheet of the Green Co. for the end of 2020 year is given below. Company is planning on making a profit of $120,000 in year 2021. Assume that the operations of the company will unfold in such a way to keep the short term assets and the liabilities accounts the same at the end of year 2021. If Green Co. wants to keep its Net Working Capital as before and does not want to buy any fixed assets, what are the options open to the company given that there will be no dividends distributed in 2021. Please clearly state your assumptions and provide the projected Balance Sheet for the end of 2021. ASSETS Current assets Cash and cash equivalents Accounts receivable Inventory Prepaid expense Investments Total current assets Property and equipment Land Buildings and improvements Equipment Less accumulated depreciation Other assets Intangible assets Less accumulated amortization Total assets $ 100,000 20,000 15,000 4,000 10,000 149,000 24,300 250,000 50,000 (5,000) 4,000 (200) $ 472,100 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable Notes payable Accrued expenses Deferred revenue Total current liabilities Long-term debt Total liabilities $ 30,000 10,000 5,000 2,000 47,000 200,000 247,000 Shareholders' Equity Common stock 10,000 Additional paid-in capital 20,000 Retained earnings 197,100 Treasury stock (2,000) Total liabilities and shareholders' equity $ 472,100
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ANS WER The options open to the company given that there will be no dividends distributed in 2021 ar... View the full answer
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
Posted Date:
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