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UMGC Canadian Bacon Inc Financial Statements Operating Cycle Problem
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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, 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 |
