167. Fellsmere Corporation Presented below are the condensed balance sheets of Fellsmere Corporation at December 31, 2014 and 2013. Net income for the years ending December 31, 2014 and 2013 is $346,000 and $109,000, respectively. December 31, 2014 December 31, 2013 Current assets $2,228,186 $2,544,683 Property, plant, & equipment (net) 530,589 376,647 Intangibles and other assets 131,206 118,121 Total assets $2,889,981 $3,039,451 Current liabilities $1,429,674 $1,003,906 Long-term obligations 3,360 7,240 Warranty and other liabilities 112,971 98,081 Total liabilities $1,546,605 $1,109,227 Stockholders' equity: Common stock $ 1,566 $ 501,631 Additional paid-in capital 365,986 799,483 Retained earnings 980,509 634,509 Accumulated other comprehensive loss (4,085) (5,489) Total stockholders' equity $1,343,976 $1,930,224 Total liabilities and stockholders' equity $2,889,981 $3,039,451 Read the information about Fellsmere Corporation. Required: (A) Explain the change in Fellsmere's working capital from 2013 to 2014. Why do users believe the current ratio provides more information than the dollar amount of working capital? Explain. (B) Fellsmere Corporation"s creditors need to know whether its working capital position improved during the year. How would you evaluate this? | |
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