Use the Following Information for Questions 86 Through 88

question 47

Multiple Choice

Use the following information for questions 86 through 88.
Gorman Construction Co. began operations in 2015. Construction activity for 2015 is shown below. Gorman uses the completed-contract method.
-Which of the following should be shown on the balance sheet at December 31, 2015 related to Contract 3?

• A) Inventory, $200,000
• B) Inventory, $350,000
• C) Inventory, $2,100,000
• D) Inventory, $2,250,000

Grasp the components and significance of the cash cycle and operating cycle in financial management.

Identify the types of short-term financing options available to firms and their appropriate utilization.

Learn how the firm's financial policies affect the components of working capital such as accounts receivable, inventory, and accounts payable.

Understand the factors that influence the cash cycle and how changes in policies can impact firm profitability.

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Definitions:

Alternative Scenarios

Different potential future events or conditions that are considered for planning, risk assessment, and strategic decision making.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings, and dividends without increasing its financial leverage or equity.

Dividend Payouts

The portion of a company's earnings that is distributed to shareholders in the form of cash or additional shares.