Question

1. Construct a balance sheet given the following data. What is shareholders' equity? Cash Inventory Plant and property Accounts receivable Accounts payable Long-term debt = $180,000 = $270,000 = $1,340,000 = $256,000 = $186,000 = $450,000 2. Lennox Furniture Company's 2016 balance sheet showed total current assets of $1,500,000. All of the current assets were required in operations, and its current liabilities consisted of $300.000 of accounts payable, $200,000 of 670 short-term notes payable to the bank, and $100,000 of accrued wages and taxes. What was the net operating working capital that was financed by investors at the end of 2016? 3. Cider House had sales of $220,000 in 2008. The COGS was $135.500, general and administrative expenses were $54,000, interest expenses were $4,500, and depreciation was $17,000. The firm's tax rate is 35%. Calculate following: a. EBIT b. Net Income 4. Fine Breads Inc. paid out $26,000 common dividends during 2016, and it ended the year with $150,000 of retained earnings. The prior year's retained earnings were $145,000. What was the firm's 2016 net income? 5. Miller Metals recently reported $9,000 of sales, $6,000 of operating costs other than depreciation, and $1,500 of depreciation. The company had no amortization charges, it had $4,000 of bonds that carry a 7% interest rate, and its federal-plus-state income tax rate was 40%. a. What was its net cash flow? b. What was its operating cash flow?

Please show all working and answer all the questions if possible

Answer 1

Solution 1. Liabilities Accounts payable Long-term debt Shareholder's equity (Balance figure) Amount Assets $ 1,86,000 Cash $ 4,50,000 Inventory $ 14,10,000 plant and property Accounts receivable $ 20,46,000 Amount $ 1,80,000 $ 2,70,000 $ 13,40,000 $ 2,56,000 $ 20,46,000 Share holder's equity = $14,10,000 Solution 2. Computation of Net working capital Total Current Assets $ 15,00,000 less: Accounts payable $ -3,00,000 less: Short term notes payable $ -2,00,000 less: Accrued wages and taxes $ -1,00,000 Net Working Capital $ 9,00,000 Solution 3. Sales less: COGS less: General and Administrative exp less: Depreciation a. EBIT less: Interest expenses Profit before tax (PBT) Tax @ 35% b. Net Income www $ 2,20,000 $ -1,35,500 $ -54,000 $ 17,000 13,500 $ -4,500 $ 9,000 $ 3,150 $ 5,850 Solution 4. Retained Eanings at the end of year $ 1,50,000 add: Common dividend $ 26,000 $ 1,76,000 less: Retianed earnings at the beg of year $ -1,45,000 Net Income $ 31,000

Solution 5. Sales less: Operating costs less: Interest paid (financing activity) less: Depreciation PBT (profit before tax) less: Tax @ 40% Net Income add: Depreciation a. Net Cash Inflow wwwwwwwwwwwww 9,000 -6,000 -280 -1,500 1,220 -488 732 1,500 2,232 Sales Operating costs less: Tax @ 40% Operating cashflow 9,000 -6,000 -488 2,512

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