1. Rick’s Razors Inc. has a net income of $90,000 this year. They depreciated $55,000 in...

1. Rick’s Razors Inc. has a net income of $90,000 this year. They depreciated $55,000 in fixed assets, paid a $43,000 dividend, increased inventory by $30,000, and reduced long-term debt by $56,000. Receivables increase by $55,000 and payables increased by $15,000. If their cash balance at the beginning of the year was $32,000, what was their cash balance at the end of the year?

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Expert Solution

Cash Balance for the year=Net income+depreciation-Dividend paid-increased inventory-reduced long term debt-increase in receiavbles+increase in payables

Ngetaive (-) sign is cash outflow

Positive (+) sign is cash inflow

Cash Balance for the year=90000+55000-43000-30000-56000-55000+15000=-24,000

Cash Balance at the end of the year=Begining of year cash balance+Cash Balance for the year=32,000-24,000=8,000

Therefore, Cash Balance at the end of the year=$8,000

jeff jeffy answered 2 years ago

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