The Martins will use a projected Income Statement to plan their operations:

Trade Receivables: $50,000 Cash: 15,000

Short Term Loan: 30,000 Share Capital: 100,000

Long Term Liabilities: 60,000 Property, Plant: 170,000

Prepaid Expenses: 5,000 Yearly LTD Retirement: 5,000

Retained Earnings: 25,000 Accumulated Depreciation: 38,000

Current Payables: 32,000 Inventories: 50,000

Q1: Copy CompuTechs Income Statement, and construct their projected Balance Sheet using the above data. [3]

Q2: What is the companys Inventory Turnover rate? [1]

Q3: If the company desires a 30-day receivable average, what Accounts Receivable level should they have? If they could invest the savings at 12% how would that impact their profits? [1]

Q4: CompuTechs competition is experiencing a 6 X inventory turns. Is CompuTech matching this performance, and if not, what level of inventory should they be maintaining? [1]