Question

Problem 2-29 Statement of Cash Flows (LG2-5) Use the balance sheet and income statement below: CLANCY’S DOG BISCUIT CORPORATION Balance Sheet as of December 31, 2021 and 2020 (in millions of dollars) Assets 2021 2020 Liabilities and Equity 2021 2020 Current assets: Current liabilities: Cash and marketable securities $ 2 $ 2 Accrued wages and taxes $ 7 $ 4 Accounts receivable 19 15 Accounts payable 14 12 Inventory 22 20 Notes payable 12 10 Total $ 43 $ 37 Total $ 33 $ 26 Fixed assets: Long-term debt $ 25 $ 21 Gross plant and equipment $ 80 $ 60 Stockholders’ equity: Less: Accumulated depreciation 15 10 Preferred stock (2 million shares) $ 2 $ 2 Net plant and equipment $ 65 $ 50 Common stock and paid-in-surplus (5 million shares) 11 11 Other long-term assets 13 13 Retained earnings 50 40 Total $ 78 $ 63 Total $ 63 $ 53 Total assets $ 121 $ 100 Total liabilities and equity $ 121 $ 100 CLANCY’S DOG BISCUIT CORPORATION Income Statement for Years Ending December 31, 2021 and 2020 (in millions of dollars) 2021 2020 Net sales $ 78 $ 82 Less: Cost of goods sold 40 36 Gross profits $ 38 $ 46 Less: Other operating expenses 7 6 Earnings before interest, taxes depreciation, and amortization (EBITDA) $ 31 $ 40 Less: Accumulated depreciation 5 5 Earnings before interest and taxes (EBIT) $ 26 $ 40 Less: Interest 6 6 Earnings before taxes (EBT) $ 20 $ 29 Less: Taxes 4 6 Net income $ 16 $ 23 Less: Preferred stock dividends $ 1 $ 1 Net income available to common stockholders $ 15 $ 22 Less: Common stock dividends 5 5 Addition to retained earnings $ 10 $ 17 Per (common) share data: Earnings per share (EPS) $ 3.00 $ 4.40 Dividends per share (DPS) $ 1.00 $ 1.00 Book value per share (BVPS) $ 12.20 $ 10.20 Market value (price) per share (MVPS) $ 12.85 $ 13.60 Prepare a statement of cash flows for Clancy’s Dog Biscuit Corporation. (Enter your answers in millions of dollars. Amounts to be deducted should be indicated with a minus sign.)

Answer 1