The following information for 2021 and 2020 is presented for BuyRite:
December 31
|
Assets Current assets: |
2021 |
2020 |
|
Cash |
$ 42,000 |
$ 54,000 |
|
Accounts receivable |
580,000 |
445,000 |
|
Inventory |
5,010,000 |
4,950,000 |
|
Prepaid expenses |
84,000 |
79,000 |
|
Total current assets |
5,716,000 |
5,528,000 |
|
Building and equipment, net |
1,097,000 |
1,095,000 |
|
Total assets |
$6,813,000 |
$6,623,000 |
|
Liabilities and Stockholders’ Equity Current liabilities: Accounts payable |
$ 605,000 |
$ 628,000 |
|
Bank loan payable |
679,000 |
625,000 |
|
Other accrued payables |
215,000 |
315,000 |
|
Total current liabilities |
1,499,000 |
1,568,000 |
|
Long-term debt |
1,729,000 |
1,791,000 |
|
Total liabilities |
3,228,000 |
3,359,000 |
|
Stockholders’ equity: Common stock |
1,307,000 |
1,307,000 |
|
|
2,278,000 |
1,957,000 |
|
Total stockholders’ equity |
3,585,000 |
3,264,000 |
|
Total liabilities and stockholders’ equity |
$6,813,000 |
$6,623,000 |
There were 100,000 shares of common stock outstanding throughout both 2020 and 2021. Additional information follows:
|
|
2021 |
2020 |
|
Market price per share at the end of year |
$ 134 |
$ 110 |
|
Net income for the year |
815,000 |
639,000 |
|
Cost of goods sold for the year |
2,900,000 |
2,700,000 |
|
Net sales for the year |
5,568,000 |
5,253,000 |
- The company intends to apply for a loan. What concerns might the loan officer have about lending to the company? (5 marks)
Step by step
Solved in 2 steps with 1 images
