Jake Marley, owner of Marley Wholesale, is negotiating with the bank for a $200,000, 90-day, 12 percent loan effective July 1 of the current vear. If the bank grants the loan, the proceeds will be $194,000, which Marley intends to use on July 1 as follows: pay accounts payable, $150,000; purchase equipment, $16,000; add to bank balance, $28,000. The current working capital position of Marley Wholesale, according to financial statements as of June 30, is as follows. Cash in bank $ 20,000 Receivables (net of allowance for doubtful accounts) 160,000 Merchandise inventory 90,000 Total current assets $ 270,000 Accounts payable (including accrued operating expenses) 150,000 Working capital. $ 120,000
Jake Marley, owner of Marley Wholesale, is negotiating with the bank for a $200,000, 90-day, 12 percent loan effective July 1 of the current vear. If the bank grants the loan, the proceeds will be $194,000, which Marley intends to use on July 1 as follows: pay accounts payable, $150,000; purchase equipment, $16,000; add to bank balance, $28,000. The current working capital position of Marley Wholesale, according to financial statements as of June 30, is as follows. Cash in bank $ 20,000 Receivables (net of allowance for doubtful accounts) 160,000 Merchandise inventory 90,000 Total current assets $ 270,000 Accounts payable (including accrued operating expenses) 150,000 Working capital. $ 120,000
Chapter8: Budgets And Bank Reconciliations
Section: Chapter Questions
Problem 1.3C
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