OPQ, Inc. 2018 statement of comprehensive income Net sales $8,953 Cost of goods sold $5,865 Depreciation...

OPQ, Inc. 2018 statement of comprehensive income
Net sales	$8,953
Cost of goods sold	$5,865
Depreciation	$?
EBIT	$?
Interest paid	$675
Earnings before taxes	$675
Taxes	$400
Net income	$705
Dividends paid	$?
Addition to retained earnings	$450

OPQ, Inc. Statement of financial positions as of December 31, 2017 and 2018
	2017	2018		2017	2018
Cash	$725	$1,135	Accounts payable	$859	$1,031
Accounts rec.	$2,330	$?	Notes payable	$?	$4,020
Inventory	$3,240	$5, 202	Current liabilities	$?	$?
Current assets	$?	$?	Long-term debt	$9,250	$9,750
Net fixed assets	$?	$9,211	Common stock	$250	$?
			Retained earnings	$?	$2,797
Total assets	$16,083	$17,848	Total liab. & equity	$?	$?

The cash flow to creditors for 2018 is ______ while the cash flow to stockholders for 2018 is _____.
A. -$640; $705
B. -$175; $255
C. $175; $255
D. $175; $450
E. $640; $450

Explain the whole process, please!

Solutions

Expert Solution

Answer:
Cash Flow to Creditors:
Net New Borrowing = Long Term Debt, 2018 - Long Term Debt, 2017
Net New Borrowing = $9,750 - $9,250
Net New Borrowing = $500

Cash Flow to Creditors = Interest Paid - Net New Borrowing
Cash Flow to Creditors = $675 - $500
Cash Flow to Creditors = $175

Cash Flow to Stockholders:
Total Assets, 2018 = Total Liabilities and Equity, 2018
Total Liabilities and Equity, 2018 = $17,848

Current Liabilities = Accounts Payable + Notes Payable
Current Liabilities, 2018 = $1,031 + $4,020
Current Liabilities, 2018 = $5,051

Total Liabilities = Current Liabilities + Long Term Debt
Total Liabilities, 2018 = $5,051 + $9,750
Total Liabilities, 2018 = $14,801

Total Liabilities and Equity = Total Liabilities + Total Equity
$17,848 = $14,801 + Total Equity, 2018
Total Equity, 2018 = $3,047

Total Equity = Common Stock + Retained Earnings
$3,047 = Common Stock, 2018 + $2,797
Common Stock, 2018 = $250

Net New Equity Issued = Common Stock, 2018 - Common Stock, 2017
Net New Equity Issued = $250 - $250
Net New Equity Issued = $0

Dividend Paid = Net Income – Addition to Retained Earnings
Dividend Paid = $705 - $450
Dividend Paid = $255

Cash Flow to Stockholders = Dividend Paid - Net New Equity Issued
Cash Flow to Stockholders = $255 - $0
Cash Flow to Stockholders = $255

Option C is Correct.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Major Manuscripts, Inc. 2012 Income Statement Net sales $ 8,600 Cost of goods sold 7,550 Depreciation...

Major Manuscripts, Inc. 2012 Income Statement Net sales $ 8,600 Cost of goods sold 7,550 Depreciation 310 Earnings before interest and taxes $ 740 Interest paid 40 Taxable Income $ 700 Taxes 280 Net income $ 420 Dividends $ 194 Major Manuscripts, Inc. 2012 Balance Sheet 2012 2012 Cash $ 2,420 Accounts payable $ 2,320 Accounts rec. 960 Long-term debt 280 Inventory 2,800 Common stock $ 2,400 Total $ 6,180 Retained earnings 4,580 Net fixed assets 3,400 Total assets $...

Bayside, Inc. 2017 Income Statement ($ in thousands) Net sales $ 6,170 Cost of goods sold...

Bayside, Inc. 2017 Income Statement ($ in thousands) Net sales $ 6,170 Cost of goods sold 4,590 Depreciation 395 Earnings before interest and taxes $ 1,185 Interest paid 44 Taxable income $ 1,141 Taxes 399 Net income $ 742 Bayside, Inc. 2016 and 2017 Balance Sheets ($ in thousands) 2016 2017 2016 2017 Cash $ 145 $ 250 Accounts payable $ 1,710 $ 1,770 Accounts rec. 1,130 970 Long-term debt 880 680 Inventory 1,805 2,130 Common stock 3,380 3,350...

Windswept, Inc. 2017 Income Statement ($ in millions) Net sales $ 8,700 Cost of goods sold...

Windswept, Inc. 2017 Income Statement ($ in millions) Net sales $ 8,700 Cost of goods sold 7,340 Depreciation 405 Earnings before interest and taxes $ 955 Interest paid 82 Taxable income $ 873 Taxes 306 Net income $ 567 Windswept, Inc. 2016 and 2017 Balance Sheets ($ in millions) 2016 2017 2016 2017 Cash $ 150 $ 185 Accounts payable $ 1,180 $ 1,260 Accounts rec. 920 730 Long-term debt 1,000 1,265 Inventory 1,520 1,550 Common stock 3,210 2,900...

Bayside Inc. 2005 Income Statement ($ in thousands) Net sales $5,680 Less: Cost of goods sold...

Bayside Inc. 2005 Income Statement ($ in thousands) Net sales $5,680 Less: Cost of goods sold 4,060 Less: Depreciation 420 Earnings before interest and taxes 1,200 Less: Interest paid 30 Taxable Income $1,170 Less: Taxes 410 Net income $ 760 Bayside, Inc. 2004 and 2005 Balance Sheets ($ in thousands) 2004 2005 2004 2005 Cash $ 70 $ 180 Accounts payable $1,350 $1,170 Accounts rec. 980 840 Long-term debt 720 500 Inventory 1,560 1,990 Common stock 3,200 3,500 Total $2,610...

Income Statement Year Ended July 31, 2018 Net Sales Revenue $28,000 Cost of Goods Sold 10,800...

Income Statement Year Ended July 31, 2018 Net Sales Revenue $28,000 Cost of Goods Sold 10,800 Gross Profit 17,200 Operating Expenses: Selling Expenses $690 Administrative Expenses 1,550 Total Operating Expenses 2,240 Operating Income 14,960 Other Income and (Expenses): Interest Expense ? Total Other Income and (Expenses) ? Net Income before Income Tax Expense ? Income Tax Expense 2,810 Net Income $ ? The income statement for UtahUtah Communications follows. Assume UtahUtah Communications signed a 3-month, 9 %9%, $ 60 comma...

The 2018 income statement of Adrian Express reports sales of $15,015,000, cost of goods sold of...

The 2018 income statement of Adrian Express reports sales of $15,015,000, cost of goods sold of $8,863,500, and net income of $1,570,000. Balance sheet information is provided in the following table. ADRIAN EXPRESS Balance Sheets December 31, 2018 and 2017 2018 2017 Assets Current assets: Cash $ 570,000 $ 730,000 Accounts receivable 1,340,000 970,000 Inventory 1,740,000 1,370,000 Long-term assets 4,770,000 4,210,000 Total assets $ 8,420,000 $ 7,280,000 Liabilities and Stockholders' Equity Current liabilities $ 1,990,000 $ 1,630,000...

Flamingo, Inc. 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less: Cost of...

Flamingo, Inc. 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less: Cost of goods sold 605 Less: Depreciation 180 Earnings before interest and taxes 599 Less: Interest paid 80 Taxable income 519 Less: Taxes 156 Net income $363 Addition to retained earnings $254 Dividends paid 109 Flamingo, Inc. 2018 and 2019 Statement of financial positions ($ in millions) 2018 2019 2018 2019 Cash $100 $121 Accounts payable $400 $350 Accounts rec. 350 425 Notes payable 390 370...

Flamingo, Inc. 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less: Cost of...

Flamingo, Inc. 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less: Cost of goods sold 605 Less: Depreciation 180 Earnings before interest and taxes 599 Less: Interest paid 80 Taxable income 519 Less: Taxes 156 Net income $363 Addition to retained earnings $254 Dividends paid 109 Unit 2 Exercise Questions Flamingo, Inc. 2018 and 2019 Statement of financial positions ($ in millions) 2018 2019 2018 2019 Cash $100 $121 Accounts payable $400 $350 Accounts rec. 350 425...

Income Statement Accounts 2014 2013 Net Sales $ 1,720,000 $ 1,450,000 Cost of Goods Sold 1,204,000...

Income Statement Accounts 2014 2013 Net Sales $ 1,720,000 $ 1,450,000 Cost of Goods Sold 1,204,000 1,015,000 Selling and Admin. Expense 220,000 185,385 Non operating revenue 9,192 8,860 Interest Expense 14,620 12,100 Earnings Before Income Tax 290,572 246,375 Provision for Income Taxes 116,473 113,616 Net Income $ 174,099 $ 132,759 Balance Sheet Accounts Current Liabilities $ 190,400 $ 189,000 Long-term debts 120,000 112,000 Preferred Stocks (10%) 100,000 100,000 Common Stocks 850,000 850,000 Retained Earnings 348,198 265,518 Other Information Total Assets...

income statement Sales 205,000 cost of goods sold -97,000 salaries expense -24,000 depreciation expense -16,000...

income statement Sales 205,000 cost of goods sold -97,000 salaries expense -24,000 depreciation expense -16,000 interest expense -2,400 loss on equipment disposal -2,500 net income 63,100 Statement of Retained Earnings Beginning Balance - Retained Earnings 6,000 Plus - Net Income 63,100 Less - Dividends (41,500) Ending Balance - Retained Earnings 27,600 Balance sheets 2018 2019 change Assets: Cash 13,000 64,600 51,600 Accounts Receivable 25,000 19,000 (6,000) Inventory 19,000 13,000 (6,000) prepaid expenses 0 0 0 Equipment 60,000 41,000 (19,000)...

Subjects