The following accounts have been selected from a company\'s balance sheet in the
ID: 2620357 • Letter: T
Question
The following accounts have been selected from a company's balance sheet in the 000's. Accounts payable $205, Inventory $405, Bank Overdraft $143, Land $2,780, Bonds $2,450 and Accounts Receivable $273. What is the amount of working 37. with values capital available to the company? A) $68,000 B) $330,000 C) $262,000 D) S660,000 38. Of the 5 Cs of credit, what is considered when attempting to determine a business capacity to borrow? A) The amount of credit requested relative to the customer's total financial resources B) The likelihood of the business's future profitability and liquidity C) The demonstrated integrity of the business's owner or its board of directors D) The general state of the economy and the industry in which the customer operates 39) The Principals of a corporation are its A) Managers B) Shareholders C) Lenders D) Executives 40) is the term used to describe a situation where the interests of the shareholders conflict with the senior managers who have been hired to run the company. Agency Problem Principal Problem Delegation Problem Arms length Attenuation A) B) C) D) 41) Directors buying or selling shares of a business on the basis of information that is not available to shareholders is called A) Limited disclosure B) Restrictive practice C) Insider-trading D) Restricted exchangeExplanation / Answer
37. Option b is correct option
Amount of working capital = Current assets - Current liabilities = (Inventories + Account receivable) - (Bank overdraft + Account payable) = (405 +273) –(143+205) = 330
38. Option a is correct option. The business's capacity to borrow is the debt by the net income of the business
39.option d is correct because the executives are the head of the company who have legal authority to represent on company's behalf.
40. Option a is correct. Agency problem arises when the objectives of the executives, owners differ from the managers.
41. Option c. Insider trading is an illegal offence when company person trade shares on non-public information to take advantage of the movement in share price
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