Hampton Machine Tool Company 9-280-103 Rev. 12/3/91 SUGGESTED ANSWERS Rocky Higgins April 2001 a)Prepare a sources and uses of cash bid for Hampton for the breaker point November 30 August 31, 1979. Sources and Uses of liquid November 30, 1978 August 31, 1979 SOURCES Increase in bank debt $1,000 Increase in retained earnings 883 descend in cash 961 Increase in leaf node advances 726 Increase in accounts account payable 600 decrease in accounts receivable 561 Increase in taxes payable 329 diminish in realise fixed assets 92 Decrease in prepaid expenses 20 TOTAL SOURCES OF CASH $5,172 USES hackneyed repurchase $3,000 Increase in inventories 2,163 Decrease in accruals 9 TOTAL USES OF CASH $5,172 b)Reflecting on this sources and uses dictation, why do you enumerate this profitable company cannot devolve its loan on reduce? What developments between November and August hold contributed to this situation? Judging from the sources and uses statement it appears that the sharp addition in inventories is responsible for the companys inability to repay its loan. This increase in inventories appears due to unprovided for(predicate) grip in receiving a comminuted part. c)Based on the data in the case, prepare a project cash figure for the quatern months, September through declination 1979. Projected bills Bud encounter September 1979 through declination 1979.
Receipts September October November December Collection of receivables* (clientes) $684 $1,323 $779 $1,604 bevel loan 350 amount cash receipts $684 $1,673 $779 $1,604 Disbursements Payment of accounts payable** $948 $600 $600 $600 Other in operation(p) outlays 400 400 400 400 task payments 181 181 Interest payments bank loan 15 15 20 20 jumper cable payments bank loan 1,350 Compra maquinaria 350 Dividend payments 150 Total disbursements $1,544 $1,365 $1,020 $2,701 lineage cash balance (caja) $1,559 $699 $1,007 $766 last-place cash...If you want to get a full essay, order it on our website: Orderessay
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