Baloon-E-Tunes -Refer to Baloon-E-Tunes

question 146

Essay

Baloon-E-Tunes

$\begin{array}{l}\begin{array}{ll}\text { Retained Earnings } & \$ 370,000 \\\text { Accumulated Depreciation } & 130,000 \\\text { Income Taxes Payable } & 240,000 \\\text { Plant } & 480,000 \\\text { Cash } & 110,000 \\\text { Accounts Receivable } & 350,000 \\\text { Common Stock } & 600,000\end{array}\begin{array}{ll}\text { Notes Payable (due in } 6 \text { years) } & \$ 120,000 \\\text { Salaries Payable } & 10,000 \\\text { Supplies } & 20,000 \\\text { AccountsPayable } & 360,000 \\\text { Inventory } & 330,000 \\\text { Land } & 500,000 \\\text { Prepaid Insurance } & 40,000\end{array}\end{array}$
-Refer to Baloon-E-Tunes.Calculate the amount of working capital at December 31,2013.What can you learn from the current ratio that you cannot learn from the amount of working capital?

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Definitions:

Fixed Cost

The costs that remain constant in total regardless of changes in the level of activity within a relevant range.

Budgeted Cash Disbursements

A projection or forecast of cash payments that a business expects to make over a specific period.

Cash Budget

A financial plan that projects cash inflows and outflows over a specific period, helping manage liquidity and ensure financial stability.

Expense Budget

A forecast of a company's expected operating expenses for a specific period.