Question

please answer 1,3 and 4

QUESTIONS AND PROBLEMS BASIC (Questions X 1 Building a Balance Sheet L01] Wims, Inc., has current assets of $4.900, net fixed assets of $27,300, current liabilities of $4,100, and long-term debt of $10,200. What is the value of the shareholders' equity account for this firm? How much is net working capital? 2. Building an Income Statement [L01] Griffin's Goat Farm, Inc., has sales of $796,000, costs of $327,000, depreciation expense of $42,000, interest expense of $34,000, and a tax rate of 21 percent. What is the net income for this firm? 3. Dividends and Retained Earnings [LOL] Suppose the firm in Problem 2 paid out $95,000 in cash dividends. What is the addition to retained earnings? 4. Per-Share Earnings and Dividends [L01] Suppose the firm in Problem 3 had 80,000 shares of common stock outstanding. What is the earnings per share, or EPS, figure? What is the dividends per share figure? 5. Calculating OCF [LO4] Pompeii, Inc., has sales of $46,200, costs of $23,100, depre- X X x

Answer 1

Answer to Question 1:

Total Assets = Current Assets + Net Fixed Assets
Total Assets = $4,900 + $27,300
Total Assets = $32,200

Total Liabilities = Current Liabilities + Long-term Debt
Total Liabilities = $4,100 + $10,200
Total Liabilities = $14,300

Total Stockholders’ Equity = Total Assets - Total Liabilities
Total Stockholders’ Equity = $32,200 - $14,300
Total Stockholders’ Equity = $17,900

Net Working Capital = Current Assets - Current Liabilities
Net Working Capital = $4,900 - $4,100
Net Working Capital = $800

Answer to Question 3:

Net Income = (Sales - Costs - Depreciation Expense - Interest Expense) * (1 - Tax Rate)
Net Income = ($796,000 - $327,000 - $42,000 - $34,000) * (1 - 0.21)
Net Income = $310,470

Additions to Retained Earnings = Net Income - Dividends
Additions to Retained Earnings = $310,470 - $95,000
Additions to Retained Earnings = $215,470

Answer to Question 4:

Earnings per share = Net Income / Shares Outstanding
Earnings per share = $310,470 / 80,000
Earnings per share = $3.88

Dividends per share = Dividends / Shares Outstanding
Dividends per share = $95,000 / 80,000
Dividends per share = $1.19