Q 1.a) Canadian Bacon Inc. financial statements are presented in the table below. Based on the information in the table, and using a 365-day year, calculate operating cycle. Round the answers to two decimal places Balance Sheet December 31, 2015 Cash and marketable securities $187,000 Accounts payable $217,000 Accounts receivable $498,000 Notes payable $51,500 Inventories $799,000 Accrued expenses $58,300 Prepaid expenses $19,300 Total current liabilities $326,800 Total current assets $1,503,300 Long-term debt $215,400 Gross fixed assets $1,978,000 Par value and paid-in-capital $128,000 Less: accumulated depreciation $478,000 Retained Earnings $2,333,100 Net fixed assets $1,500,000 Common Equity 2,461,100 Total assets $3,003,300 Total liabilities and owner’s equity $3,003,300 Income Statement, Year of 2015 Net sales (all credit) $5,386,600.00 Less: Cost of goods sold $3,716,754.00 Selling and administrative expenses $329,000.00 Depreciation expense $138,000.00 EBIT $1,202,846.00 Interest expense $39,600.00 Earnings before taxes $1,163,246.00 Income taxes $465,298.40 Net income $697,947.60 2.a) American Bacon Inc. financial statements are presented in the table below. Based on the information in the table, and using a 365-day year, calculate Average Day’s Purchases. Round the answers to two decimal places Balance Sheet December 31, 2010 Cash and marketable securities $102,000 Accounts payable $287,000 Accounts receivable $299,000 Notes payable $61,200 Inventories $628,000 Accrued expenses $51,900 Prepaid expenses $10,300 Total current liabilities $400,100 Total current assets $1,039,300 Long-term debt $415,000 Gross fixed assets $1,502,000 Par value and paid-in-capital $376,000 Less: accumulated depreciation $312,000 Retained Earnings $1,038,200 Net fixed assets $1,190,000 Common Equity 1,414,200 Total assets $2,229,300 Total liabilities and owner’s equity $2,229,300 Income statement, Year of 2010 Net sales (all credit) $6,387,700.00 Less: Cost of goods sold $4,726,898.00 Selling and administrative expenses $345,000.00 Depreciation expense $148,000.00 EBIT $1,167,802.00 Interest expense $50,600.00 Earnings before taxes $1,117,202.00 Income taxes $446,880.80 Net income $670,321.20 3.a) American Bacon Inc. financial statements are presented in the table below. Based on the information in the table, and using a 365-day year, calculate Days payables outstanding (Payables conversion period). Round the answers to two decimal places Balance Sheet December 31, 2010 Cash and marketable securities $102,000 Accounts payable $287,000 Accounts receivable $299,000 Notes payable $61,200 Inventories $628,000 Accrued expenses $51,900 Prepaid expenses $10,300 Total current liabilities $400,100 Total current assets $1,039,300 Long-term debt $415,000 Gross fixed assets $1,502,000 Par value and paid-in-capital $376,000 Less: accumulated depreciation $312,000 Retained Earnings $1,038,200 Net fixed assets $1,190,000 Common Equity 1,414,200 Total assets $2,229,300 Total liabilities and owner’s equity $2,229,300 Income statement, Year of 2010 Net sales (all credit) $6,387,700.00 Less: Cost of goods sold $4,726,898.00 Selling and administrative expenses $345,000.00 Depreciation expense $148,000.00 EBIT $1,167,802.00 Interest expense $50,600.00 Earnings before taxes $1,117,202.00 Income taxes $446,880.80 Net income $670,321.20 4.Canadian Bacon Inc. financial statements are presented in the table below. Based on the information in the table, and using a 365-day year, calculate cash conversion cycle. Round the answers to two decimal places Balance Sheet December 31, 2014 Cash and marketable securities $132,000 Accounts payable $399,000 Accounts receivable $311,000 Notes payable $98,500 Inventories $512,000 Accrued expenses $89,300 Prepaid expenses $11,300 Total current liabilities $586,800 Total current assets $966,300 Long-term debt $799,400 Gross fixed assets $2,104,000 Par value and paid-in-capital $298,000 Less: accumulated depreciation $398,000 Retained Earnings $988,100 Net fixed assets $1,706,000 Common Equity 1,286,100 Total assets $2,672,300 Total liabilities and owner’s equity $2,672,300 Income Statement, Year of 2014 Net sales (all credit) $4,276,600.00 Less: Cost of goods sold $3,292,982.00 Selling and administrative expenses $349,000.00 Depreciation expense $148,000.00 EBIT $486,618.00 Interest expense $49,600.00 Earnings before taxes $437,018.00 Income taxes $174,807.20 Net income $262,210.80

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