Spring 2014 GWU MBAD 6211 HC Case: Colonial Back Crackers Essay

Words: 1272
Pages: 6

Spring
2014
GWU
MBAD
6211
HC
Case:
Colonial
Back
Crackers

Colonial
Back
Crackers
is
a
small
physical
therapy
practice
in
the
Washington
DC

area.

Colonial
has
been
in
business
for
several
years
focusing
on
providing
PT

services
and
products.

George,
a
GWU
MBA
grad,
founded
and
continues
to
run
the

business.





For
various
reasons
including
new
entrants
in
the
PT
space
and
margin

compression
from
reduced
payments
from
insurance
…show more content…
Here
are

the
summary
transactions
for
the
remaining
4
months
of
the
year:



1.

The firm paid off all existing accounts payable to the suppliers

2.

It paid $130,000 on two-day vacation for its most important suppliers.

3.

To announce the newly integrated facility, Buff spent $100,000 contacting Colonial’s
customers and letting them know of the additional services Buff offers.

4.

Gross purchases of inventory totaled $11,230,000. Purchase returns were $25,000. The
firm was conscientious about taking cash payment discounts and took $120,845 in cash
discounts. At year-end the firm had remaining accounts payable of $1,480,000.
Transportation-in costs, all paid in cash, were $130,000 [hint: you can calculate cash paid
to suppliers for inventory purchases from this information.]

5.

All sales are on credit. Sold inventory for $18,500,000 at a gross profit