Question based on modified problems $4\mathrm{.}3$ from the reference text $[$Flynn $(2009)]$ from page $135$ of the textbook:

Fill a balance sheet for the company at the end of two years of operation $($Assume $30$ days$/$month$)$:

a$.$ The company has gross sales of $$48$ million per year and the pattern of sales is even, i$.$e$.$ there is no cyclical pattern to sales.

b$.$ Customers are large firms with a typical payment pattern of every $45$ days.

c$.$ COGS covers material only and takes $60\%$; labour costs are in SG&A

d$.$ Monthly payroll is $$20000,$ paid biweekly; when issuing this balance sheet, it was right before the biweekly payment.

e$.$ There are enough raw materials on hand to support one month of manufacturing; two months of actual production of finished goods are in the warehouse.

f$.$ The company pays its suppliers $30$ days after goods are received.

g$.$ The owners started the business with an initial capital injection of $$5\mathrm{.}6$ million $25$ months ago.

h$.$ The owners borrowed $$3$ million of long$-$term debt with the principal repayment in $10$ equal annual payments $($assume the principal repayment on debt has been made for year $2).$

i$.$ The company purchased $$8$ million assets with a straightline depreciation period of $10$ years.

j$.$ In the first two years of the business, the company had a cumulative net income of $$1,800,000$ and paid dividends of $$300,000($ $$150,000$ per year$)$ to the owners.

k$.$ The company has a short$-$term credit line that runs positive or negative based on the fluctuations of the business.

Notes:

Use the information provided in the problem statement to assign the quantities for the various accounts in the balance sheet below.

Calculate the required quantities to indicate the correct amount on each of blanks in the balance sheet for those accounts.

Express your quantities in your answer in thousands $($$$000).$

If needed, round your answer to $2$ decimal places.

Answer the questions regarding the hypothetical scenario presented after the balance sheet.

Balance Sheet $-$ $$(000)$

Assets

Current Assets:

Cash

Receivables

Short Term Investments

Inventory

Prepaid Expenses

Sum of the Current Assets

Fixed Assets:

Land, Bld$.$&Equip.@Cost

Less Accumulated Depreciation

Total Fixed Assets

Long Term Investments

Goodwill

Total Assets

Working Capital

Working Capital Ratio

Liabilities

Current Liabilities:

Short$-$Term Credit Line

Accounts Payable

Accrued Expenses

Taxes Payable

Current Portion Long$-$

Term Debt

Sum of the Current

Liability

Long$-$Term Liabilities:

Repayable Grants

Long$-$Term Debt

Shareholders Equity:

Capital Shares

Retained Earnings

Total Liability and

Equity

If the cumulative dividend over two years had been $$1,800,000$ instead of $$300,000($if all the profits had been taken out of the business as dividends$),$

A short$-$term lender would be more $|,$ with this situation.

Would working capital still be positive?

If you cut the inventory in half by a vigorous program of "just in time" manufacturing and shipping,

by how much would your short$-$term debt drop? $ million $($keep one decimal place in your answer$)$

Would the working capital change?