2017 2018 Sales $ 2,900 3,300 COGS 2,030 2,310 Interest 410 420 Dividends 56 79 Depreciation...

2017 2018

Sales $ 2,900 3,300

COGS 2,030 2,310

Interest 410 420

Dividends 56 79

Depreciation 290 330

Cash 250 150

Receivables 242 412

Current liabilities 900 1,100

Inventory 1,015 900

Long-term debt 3,200 3,100

Net fixed assets 6,000 5,700

Retained earnings 1,050 ?

Tax rate 34% 34%

Given the above information, what is the operating cash flow and retained earnings balance for 2018?

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Expert Solution

Income Statement for 2018

Sales	3,300.00
Less: Cost of goods sold	2,310.00
Less: Depreciation	330.00
Earnings before Interest & Tax (EBIT)	660.00
Less: Interest Expenses	420.00
Earnings before tax (EBT)	240.00
Less: Tax at 34% [$240 x 34%]	81.60
Net Income	158.40

Operating Cash Flow
Earnings before Interest & Tax (EBIT)	660.00
Add: Depreciation Expenses	330.00
Less: Taxes	81.60

Operating Cash Flow	908.40

Retained earnings balance for 2018
Retained earnings balance at the beginning	1,050.00
Add: Net Income for the Year	158.40
Less: Dividends paid	79.00

Retained earnings balance for 2018	1,129.40

jeff jeffy answered 1 year ago

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