Question

Use the following financial statements: Dynamic Mattress Year-End Balance Sheet for 2014 (figures in $ millions) Current Assets: Current Liabilities: Cash 20 Bank loans 25 Marketable securities 0 Accounts payable 110 Accounts receivable 125 Total current liabilities 135 Inventory 130 Total current assets 275 Long-term debt 60 Net worth (equity and retained earnings) 320 Fixed assets: Gross investment 320 Less depreciation 80 Net fixed assets 240 Total assets 515 Total liabilities and net worth 515 Dynamic Mattress Year-End Balance Sheet for 2013 (figures in $ millions) Current Assets: Current Liabilities: Cash 20 Bank loans 20 Marketable securities 10 Accounts payable 75 Accounts receivable 110 Total current liabilities 95 Inventory 100 Total current assets 240 Long-term debt 25 Net worth (equity and retained earnings) 300 Fixed assets: Gross investment 250 Less depreciation 70 Net fixed assets 180 Total assets 420 Total liabilities and net worth 420 Dynamic Mattress Income Statement for 2014 (figures in $ millions) Sales 1,500 Operating costs 1,405 95 Depreciation 10 85 Interest 5 Pretax income 80 Tax at 50% 40 Net income 40 Notes: Dividend = $20 Retained earnings = $20 Prepare the statement of cash flows for 2014. (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers in millions.) Dynamic Mattress Statement of Cash Flows for 2014 (figures in $ millions) Sources: Sold marketable securities Increased bank loans Increased accounts payable Increased long term debt Cash from operations: Net income Depreciation Total sources Uses: Increased inventories Increased accounts receivable Invested in fixed assets Dividend Total uses Increase in cash balance

Answer 1

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