Question

In: Finance

Using the following information to answer questions (short answer) Below are the 2017 and 2018 year-end...

Using the following information to answer questions (short answer)

Below are the 2017 and 2018 year-end balance sheets for firm AAA:

Assets:                                                                      2018                                        2017      

Cash                                                                           --------                                   158,000

Accounts receivable                                                   864,000                                   700,000

Inventories                                                             2,000,000                               1,400,000

Total current assets                                             $3,064,000                              $2,270,000

Net fixed assets                                                      6,000,000                               5,600,000

Total assets                                                                 ---------                                  -----------

Liabilities and equity:

Accounts payable                                                  $1,400,000                              $1,090,000

Notes payable                                                        1,600,000                               1,800,000

Total current liabilities                                       $3,000,000                              $2,890,000

Long-term debt                                                      2,400,000                               2,400,000

Common stock                                                       3,000,000                               2,000,000

Retained earnings                                                      664,000                                   580,000

Total common equity                                          $3,664,000                              $2,580,000

Total liabilities and equity                                     -------------                             ---------------

Assume sales in 2017 and 2018 were the same. 200,000 = depreciation. 500,000 = net income. No dividend paid.

1. Calculate net cash flow from operation.

2. Calculate net cash flow from investment.

3. Calculate net cash flow from financing.

4. Calculate net changes in cash

Solutions

Expert Solution

Answer 1
Net Cash flow from Operations
Net Income $500,000.00
Depreciation $200,000.00
Increase in Accounts Receivable -$164,000.00
Increase in Inventories -$600,000.00
Increase in Accounts Payable $310,000.00
Net Cash flow from Operations $246,000.00
Answer 2
Net Cash flow from Investment
Net Fixed assets as of 2017 $5,600,000.00
Less : Net fixed assets as of 2018 $6,000,000.00
Less : Depreciation $200,000.00
Net Cash flow from Investment -$600,000.00
Answer 3
Net Cash flow from Financing
Decrease in Notes Payable -$200,000.00
Issue of Common Stock $584,000.00
Net Cash flow from Financing $384,000.00
Answer 4
Net changes in Cash
Net Cash flow from Operations $246,000.00
Net Cash flow from Investment -$600,000.00
Net Cash flow from Financing $384,000.00
Net changes in Cash $30,000.00
Working
Calculation of stock dividend paid
Retained earnings as of 2017 $580,000.00
Add : Net Income for 2018 $500,000.00
Less : Retained Earnings as of 2018 $664,000.00
Stock dividend paid $416,000.00
Calculation of Issue of common stock for cash
Total issue of Common stock $1,000,000.00
Less : Stock dividend paid $416,000.00
Issue of Common stock for cash $584,000.00

jeff jeffy answered 11 months ago
Next > < Previous

Related Solutions

Answer the questions below using the following information on a firm:
Answer the questions below using the following information on a firm: Output (Quantity) Total Cost 0 $50 1 60 2 80 3 110 4 150 5 200 6 260 7 330 8 410 What is average total cost at Q=7? What is marginal cost at Q =7? Is this firm operating under increasing or diminishing returns at Q=7? Why? Say this firm is a perfect competitor. If the market price for its product is $ 60, at what output level...
[The following information applies to the questions displayed below.]     The following calendar year-end information is...
[The following information applies to the questions displayed below.]     The following calendar year-end information is taken from the December 31, 2019, adjusted trial balance and other records of Leone Company.     Advertising expense $ 28,200 Direct labor $ 686,300 Depreciation expense—Office equipment 9,100 Income taxes expense 268,200 Depreciation expense—Selling equipment 10,200 Indirect labor 58,600 Depreciation expense—Factory equipment 32,800 Miscellaneous production costs 10,700 Factory supervision 131,500 Office salaries expense 73,000 Factory supplies used 8,400 Raw materials purchases 967,000 Factory utilities...
Answer the following questions using the information below: The following information is for Alex Corp: Product...
Answer the following questions using the information below: The following information is for Alex Corp: Product X: Revenue $15.00 Variable Cost $2.50 Product Y: Revenue $25.00 Variable Cost $10.00 Total fixed costs $50,000 ) The current sales mix is two units of Product X and one unit of Product Y. If the sales mix shifts to one unit of Product X and two units of Product Y, then the weighted-average contribution margin will ________. Question 26 options: decrease per unit...
Required information [The following information applies to the questions displayed below.]    The following calendar year-end...
Required information [The following information applies to the questions displayed below.]    The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Leone Company. Advertising expense $ 28,750 Direct labor $ 675,480 Depreciation expense—Office equipment 7,250 Income taxes expense 233,725 Depreciation expense—Selling equipment 8,600 Indirect labor 56,875 Depreciation expense—Factory equipment 33,550 Miscellaneous production costs 8,425 Factory supervision 102,600 Office salaries expense 63,000 Factory supplies used 7,350 Raw materials purchases 925,000 Factory...
Required information [The following information applies to the questions displayed below.]     The following calendar year-end...
Required information [The following information applies to the questions displayed below.]     The following calendar year-end information is taken from the December 31, 2019, adjusted trial balance and other records of Leone Company.     Advertising expense $ 33,400 Direct labor $ 672,000 Depreciation expense—Office equipment 7,700 Income taxes expense 241,800 Depreciation expense—Selling equipment 10,000 Indirect labor 58,000 Depreciation expense—Factory equipment 37,700 Miscellaneous production costs 9,700 Factory supervision 134,900 Office salaries expense 62,000 Factory supplies used 9,000 Raw materials purchases 972,000...
Use the following information to answer the next Two questions : 2018 2017 Cash 15,000 14,000...
Use the following information to answer the next Two questions : 2018 2017 Cash 15,000 14,000 A/R 24,000 25,000 Inventory 79,000 78,000 Prepaid Insurance 5,000 4,000 Preoperty plant, & Equipment 35,000 30,000 Accumlated Depreciation (7,000) (5,000) Total Assets 151,000 146,000 Account Payable 6,000 9,000 Bonds Payable (mature in yr 2022 45,000 60,000 Common Stock 70,000 60,000 Retaind Earnings 30,000 17,000 Total Liabilities & Equity 151,000 146,000 Sunny Company had the following comparative balance sheet information for 2018, 2017: Sunny reported...
Answer the questions below using the following information on stocks A, B, and C. A B...
Answer the questions below using the following information on stocks A, B, and C. A B C Expected Return 13% 13% 10% Standard Deviation 12% 10% 10% Beta 1.6 2 0.5                          Assume the risk-free rate of return is 4% and the expected market return is 10% Assuming an investor who will invest all of his money into one security, which stock will the investor choose? Assuming an investor with a well-diversified portfolio, which stock would the investor want to...
Using the following information, fill in the balance sheet below, and then answer questions 6 -...
Using the following information, fill in the balance sheet below, and then answer questions 6 - 10 Green Co. began operation on January 1, 2011. On January 1, 2011, the company purchased $9,500 of Equipment. Green has not purchased any additional equipment since this initial purchase, nor have they sold any equipment. This equipment is being depreciated on a straight-line basis to a $500 salvage value over an estimated depreciable life of 10 years. The following is a list of...
Use the following information to answer the questions below:
Use the following information to answer the questions below: note: all sales are credit sales Income Stmt info: 2016 2017 Sales $ 975,000 $        1,072,500 less Cost of Goods Sold: 325,000 346,125 Gross Profit 650,000 726,375 Operating Expenses 575,000 609,500 Earnings before Interest & Taxes 75,000 116,875 Interest exp 25,000 31,000 earnings before Taxes 50,000 85,875 Taxes 20,000 34,350 Net Income $ 30,000 $              51,525 Balance Sheet info: 12/31/2016 12/31/2017 Cash 60,000 $ 63,600 Accounts Receivable 80,000 $ 84,000 Inventory...
Below are the 2018 and 2019 year-end balance sheets for Tran Enterprises: Assets: 2018 2017 Cash...
Below are the 2018 and 2019 year-end balance sheets for Tran Enterprises: Assets: 2018 2017 Cash $ 200,000 $ 170,000 Accounts receivable 864,000 700,000 Inventories 2,000,000 1,400,000 Total current assets $3,064,000 $2,270,000 Net fixed assets 6,000,000 5,600,000 Total assets $9,064,000 $7,870,000 Liabilities and equity: Accounts payable $1,400,000 $1,090,000 Notes payable to bank 1,600,000 1,800,000 Total current liabilities $3,000,000 $2,890,000 Long-term debt 2,400,000 2,400,000 Common stock 3,000,000 2,000,000 Retained earnings 664,000 580,000 Total common equity $3,664,000 $2,580,000 Total liabilities and equity...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT