Mary Walker, president of Rusco Company, considers $22,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $17,000 in cash was available at the end of this year. Since the company reported a large net income for the year, and also issued both bonds and common stock, the sharp decline in cash is puzzling to Ms. Walker. Assets Current assets: Cash Accounts receivable Inventory Prepaid expenses Total current assets Rusco Company Comparative Balance Sheet at July 31 This Year Last Year $ 17,000 202,400 251,800 8,400 479,600 $ 35,400 212,600 197,200 17,400 462,600
Mary Walker, president of Rusco Company, considers $22,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $17,000 in cash was available at the end of this year. Since the company reported a large net income for the year, and also issued both bonds and common stock, the sharp decline in cash is puzzling to Ms. Walker. Assets Current assets: Cash Accounts receivable Inventory Prepaid expenses Total current assets Rusco Company Comparative Balance Sheet at July 31 This Year Last Year $ 17,000 202,400 251,800 8,400 479,600 $ 35,400 212,600 197,200 17,400 462,600
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter14: Statement Of Cash Flows
Section: Chapter Questions
Problem 36E: During the year, Hepworth Company earned a net income of 61,725. Beginning and ending balances for...
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