Question

Quarles Industries had the following operating results for 2015: sales = $30,660; cost of goods sold = $20,260; depreciation expense = $5,660; interest expense = $3,090; dividends paid = $1,950. At the beginning of the year, net fixed assets were $17,480, current assets were $5,960, and current liabilities were $3,575. At the end of the year, net fixed assets were $21,160, current assets were $7,180, and current liabilities were $4,100. The tax rate for 2015 was 30 percent.

  

a.	What is net income for 2015? (Do not round intermediate calculations.)

  

Net income

$

  

b.	What is the operating cash flow for 2015?  (Do not round intermediate calculations.)

  

Operating cash flow

$

c.	What is the cash flow from assets for 2015? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.)

Cash flow from assets

$

Answer 1

Cash flow to creditors Cash flow to creditors Interest-New long term debt 3,090 Income Statement Sales $ 30,660 Less: Costs $ 20,260 Less: Depreciation $ 5,660 EBIT $ 4,740 Less: Interest $ 3,090 EBT $ 1,650 Less: Tax @ 30% $ 495 Net income $ 1,155 Less: Dividends $ 1,950 Addition to RE $ (795) Cash flow to stockholders Cash flow to stockholders Dividends - Net new equity -$3,220 =1950-5170 Equity at beginning $ Equity at Ending $ 19,865 24,240 =17480+5960-3575 = 21160+7180-4100 Cash flow from Assets Cash flow from Assets CFC + CFS -$130 =3090-3220 $ 4,375 Increase in equity Less: Retained earnings $ (795) Net income 55 Operating cash flow EBIT-Taxes+Depreciation $9,905 Operating cash flow 9,905 Net new equity $ 5,170 Operating cash flow Cash flow from Assets =4740-495+5660

*Please rate thumbs up