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

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


The firm paid off all existing accounts payable to the suppliers


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


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


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.]


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