Comparative financial statement data for Carmono Company follow:

For this year, the company reported net income as follows:

This year Carmono declared and paid a cash dividend. There were no sales of property, plant, and equipment during this year. The company did not repurchase any of its own stock this year.

Required:

1. Using the indirect method, prepare a statement of cash flows for this year.

2. Compute Carmono’s free cash flow for this year.

• Required 1
• Required 2

Using the indirect method, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts. Round your intermediate calculations and final answers to 2 decimal places.)

• Required 2

Compute Carmono’s free cash flow for this year. (Negative amount should be indicated by a minus sign. Round your intermediate calculations and final answer to 2 decimal places.)

Your 40-year clients, who have a 12-year old child, plan to retire at the age of 62. Assume 360-day year and 30-day month in your calculations.

They have a current salary at an annual rate of $144000, being paid equally at the end of each month. They expect a 3% raise in their salary every year until they retire. They deposit 12% of their monthly salary to their 401(k) account that generates an annual rate of return of 10%, compounded daily. In addition, their employer matches their contribution with 5% of their salary to the same 401(k) account.

Currently, annual college expenses are running at $30,000, and are expected to grow at an annual rate of 5%. Their child is expected to enter college when she turns 18, and complete the degree program in 5 years. Your clients expect their child to be responsible for 20% of college expenses via the work-study program. All annual college expenses are due at the beginning of each year. Your clients plan to tap into the 529 Plan account for paying their child’s college expenses. Is there sufficient funding in the 529 account for financing their child’s college expenses? If not, when will the funding run out of money? Support your answers numerically.

Your 40-year clients, who have a 12-year old child, plan to retire at the age of 62. Assume 360-day year and 30-day month in your calculations.

They have a current salary at an annual rate of $144000, being paid equally at the end of each month. They expect a 3% raise in their salary every year until they retire. They deposit 12% of their monthly salary to their 401(k) account that generates an annual rate of return of 10%, compounded daily. In addition, their employer matches their contribution with 5% of their salary to the same 401(k) account.

At the end of each year, your clients will receive a bonus of 15% of their annual salary. Your clients commit to deposit part of their annual bonus, $15,000, in a 529 Plan account each year for financing their child’s college education. They will keep contributing to the 529 account until their child finishes college. Any remaining amount from the annual bonus check will be deposited in an IRA account. Both of these accounts are expected to generate an annual rate of return of 9%, compounded monthly.

1. Determine the cash flows pattern of their contributions to the IRA account; and calculate and explain precisely your choice of interest rate, i.e., EAR/EPR/PER, used in your analysis. And calculate their IRA account balance upon their retirement.

2. Determine the cash flows pattern of their contributions to the 529 Plan account; and calculate and explain precisely your choice of interest rate, i.e., EAR/EPR/PER, used in your analysis. And calculate the 529 Plan account balance at the time their child starts college.

Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses.

Additional Information on Current Year Transactions

1. The loss on the cash sale of equipment was $20,125 (details in b).
2. Sold equipment costing $91,875, with accumulated depreciation of $45,125, for $26,625 cash.
3. Purchased equipment costing $111,375 by paying $60,000 cash and signing a long-term note payable for the balance.
4. Borrowed $5,500 cash by signing a short-term note payable.
5. Paid $57,625 cash to reduce the long-term notes payable.
6. Issued 4,000 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $53,100.

1. Prepare a complete statement of cash flows using the indirect method for the current year.

A stock has had the following year-end prices and dividends:

Your 40-year clients, who have a 12-year old child, plan to retire at the age of 62. Assume 360-day year and 30-day month in your calculations.

They have a current salary at an annual rate of $144,000, being paid equally at the end of each month.

They expect a 3% raise in their salary every year until they retire.

They deposit 12% of their monthly salary to their 401(k) account that generates an annual rate of return of 10%, compounded daily.

In addition, their employer matches their contribution with 5% of their salary to the same 401(k) account.

Q1 Determine the cash flows pattern of the total monthly contributions to the 401(k)

account within each year; and calculate and explain precisely your choice of interest rate, i.e., EAR/EPR/PER,

used in your analysis. And calculate the year-end value of the 401(k) contributions for each year.

Q2 Determine the pattern of the year-end values of the 401(k) contributions across years;

and calculate and explain precisely your choice of interest rate, i.e., EAR/EPR/PER, used in your analysis. And calculate their 401(k) account balance upon their retirement.

2) PROJECT CASH FLOW

Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The financial staff has collected the following information on the project:

The company has a 40% tax rate, and its WACC is 11%.

Write out your answers completely. For example, 13 million should be entered as 13,000,000.

What is the project's cash flow for the first year (t = 1)? Round your answer to the nearest dollar.
_______________$

If this project would cannibalize other projects by $2.5 million of cash flow before taxes per year, how would this change your answer to part a? Round your answer to the nearest dollar.
The firm's project's cash flow would now be $____________ .

Ignore part b. If the tax rate dropped to 35%, how would that change your answer to part a? Round your answer to the nearest dollar.
The firm's project's cash flow would increase by $ ____________.

Roth Inc. experienced the following transactions for Year 1, its first year of operations:

1. Issued common stock for $80,000 cash.
2. Purchased $225,000 of merchandise on account.
3. Sold merchandise that cost $168,000 for $334,000 on account.
4. Collected $282,000 cash from accounts receivable.
5. Paid $210,000 on accounts payable.
6. Paid $64,000 of salaries expense for the year.
7. Paid other operating expenses of $53,000.
8. Roth adjusted the accounts using the following information from an accounts receivable aging schedule:

Required
a. Record the above transactions in general journal form and post to T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

• Record entry for issuance of common stock.

Note: Enter debits before credits.

Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses.

Additional Information on Current Year Transactions

1. The loss on the cash sale of equipment was $5,125 (details in b).
2. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash.
3. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance.
4. Borrowed $4,000 cash by signing a short-term note payable.
5. Paid $50,125 cash to reduce the long-term notes payable.
6. Issued 2,500 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $50,100. Prepare a complete statement of cash flows using the indirect method for the current year.