Following are two years of income statements and balance sheets for the Munich E
ID: 2817372 • Letter: F
Question
Following are two years of income statements and balance sheets for the Munich Exports Corporation.
MUNICH EXPORTS CORPORATION
Balance Sheet 2012 2013
Cash $50,000 $50,000
Accounts Receivables 200,000 300,000
Inventories 450,000 570,000
Total Current Assets 700,000 920,000
Fixed Assets, Net 300,000 380,000
Total Assets $1,000,000 $1,300,000
Accounts Payable 130,000 $180,000
Accruals 50,000 70,000
Bank Loan 90,000 90,000
Total Current Liabilities 270,000 340,000
Long-Term Debt 400,000 550,000
Common Stock ($.05 par) 50,000 50,000
Additional Paid-in-Capital 200,000 200,000
Retained Earnings 80,000 160,000
Total Liab. & Equity $1,000,000 $1,300,000
Income Statement 2012 2013
Net Sales $1,300,000 $1,600,000
Cost of Goods Sold 780,000 960,000
Gross Profit 520,000 640,000
Marketing 130,000 160,000
General & Administrative 150,000 150,000
Depreciation 40,000 55,000
EBIT 200,000 275,000
Interest 45,000 55,000
Earnings Before Taxes 155,000 220,000
Income Taxes (40% rate) 62,000 88,000
Net Income $93,000 $132,000
48. Using the financial statements for Munich Exports above, calculate the cash build for Munich Exports in 2013.
a. $1300
b. $1500
c. $1700
d. $1600
49. Using the financial statements for Munich Exports shown above, calculate the cash burn (note, not the net cash burn) for Munich Exports in 2013.
a. $1668
b. $1455
c. $1718
d. $1598
A trade secret can potentially last ___________ if secrecy is maintained.
a.Forever
b.Life of Author + 70 years unless a work for hire
c.20 years from the date of filing
d.15 years from the date of grant
e. None of the above
Explanation / Answer
48. Cash build for Munich corporation:( answer in thousands )
Net sales -( increase in accounts receivable)
=$1,60,000 - ($3,00,000 - $2,00,000)
=$1,500
the correct option is option b.
49. cash burn:
operating expenses : cost of goods sold + marketing + general administrative
=$9,60,000 + $1,60,000 + $1,50,000
=1,270,000
other cash expenses = interest and taxes = $55,000 + $88,000 = $143000
incraese in inventories: ( $5,70,000 - $4,50,000) = $120,000
changes in payables and accrued liabilities =(1,80,000 - $1,30,000) + ($70,000 - $50,000) = $70,000
capital expendiures : change in net fixed assets + depreciation
=( $3,80,000 - $3,50,000) + $55,000
=$1,35,000
the total cash burn is = $1270,000 + $143000 + $120000 - $70,000 + $1,35,000
=$1598
the correct option is option d.
3. the correct option is option a.
unlike patents and trademarks which can last from 20 to 100 years . a trade secret can last longer, that much longer until the person from whom a trade secret is kept independently discovers the hidden information.