The raattama corporation | Accounting homework help

The Raattama Corporation had sales of $3.5 favorite decisive year, and it earned a 5% produce (following taxes) on sales. Recently, the adjust has oppressed after in its accounts payable. Although its stipulations of acquisition are intrap 30 days, its accounts payable state 60 days’ acquisitions. The adjust’s treasurer is seeking to growth bank borrowings in adjust to grace floating in parley its traffic obligations (that is, to possess 30 days’ payables ungathered). The adjust’s poise shuffle is as follows (in thousands of dollars):

Cash

$100

Accounts payable

$600

Accounts receivable

300

Bank mortgages

700

Inventory

1,400

Accruals

200

Floating Assets

$1,800

Floating liabilities

$1,500

Land and buildings

600

Mortage on existent estate

700

Equipment

600

Common fund, $0.10 par

300

 

 

Retained earnings

500

Entirety Assets

$3,000

Entirety liabilities and equity

$3,000

a. How abundant bank financing is needed to reject the past-due accounts payable?

b. Exhibit that the bank earn mortgage the solid the whole congenial in allot a. The stipulations of the mortgage offered are 8%, mere concern, and the bank uses a 360-day year ce the concern consideration. What is the concern carry ce individual month? (Exhibit there are 30 days in a month.)

c. Now repudiate allot b and exhibit that the bank earn mortgage the solid the whole congenial in allot a. The stipulations of the mortgage are 7.6%, add-on concern, to be repaid in 12 monthly installments.

1. What is the entirety mortgage whole?

2. What are the monthly installments?

3. What is the APR of the mortgage?

4. What is the powerful reprove of the mortgage?

d. Would you, as a bank mortgage official, construct this mortgage? Why or why not attributable attributable?

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