Use the financial statements below to determine the CFO, CFF and CFI for the cur
ID: 1175439 • Letter: U
Question
Use the financial statements below to determine the CFO, CFF and CFI for the current year.
Income Statement (current year)
Sales
$7,035,600
Cost of goods sold
5,800,000
Depreciation
120,000
Other expenses
612,960
EBIT
$502,640
Interest expense
80,000
EBT
$422,640
Taxes (40%)
169,056
Net income
$253,584
Retained Earnings
$198,584
Dividends
$55,000
Balance Sheet
Last year
Current year
Last year
Current year
Liabilities and Equity
Cash
$7,282
$14,000
Accounts payable
$324,000
$359,800
Accounts receivable
652,160
$949,632
Notes payable
720,000
$300,000
Inventories
1,287,360
$1,716,480
Accruals
284,960
$380,000
Total current assets
$1,946,802
$2,680,112
Total current liabilities
$1,328,960
$1,039,800
Gross fixed assets
1,202,950
$1,220,000
Long-term debt
1,000,000
$500,000
Less: Accumulated depreciation
263,160
$383,160
Net fixed assets
$939,790
$836,840
Common stock (100,000 shares)
460,000
$1,680,936
Retained earnings
97,632
$296,216
Total equity
$557,632
$1,977,152
Total assets
$2,886,592
$3,516,952
Total liabilities and equity
$2,886,592
$3,516,952
Use the financial statements below to determine the CFO, CFF and CFI for the current year.
Income Statement (current year)
Sales
$7,035,600
Cost of goods sold
5,800,000
Depreciation
120,000
Other expenses
612,960
EBIT
$502,640
Interest expense
80,000
EBT
$422,640
Taxes (40%)
169,056
Net income
$253,584
Retained Earnings
$198,584
Dividends
$55,000
Balance Sheet
Last year
Current year
Last year
Current year
Liabilities and Equity
Cash
$7,282
$14,000
Accounts payable
$324,000
$359,800
Accounts receivable
652,160
$949,632
Notes payable
720,000
$300,000
Inventories
1,287,360
$1,716,480
Accruals
284,960
$380,000
Total current assets
$1,946,802
$2,680,112
Total current liabilities
$1,328,960
$1,039,800
Gross fixed assets
1,202,950
$1,220,000
Long-term debt
1,000,000
$500,000
Less: Accumulated depreciation
263,160
$383,160
Net fixed assets
$939,790
$836,840
Common stock (100,000 shares)
460,000
$1,680,936
Retained earnings
97,632
$296,216
Total equity
$557,632
$1,977,152
Total assets
$2,886,592
$3,516,952
Total liabilities and equity
$2,886,592
$3,516,952
Income Statement (current year)
Sales
$7,035,600
Cost of goods sold
5,800,000
Depreciation
120,000
Other expenses
612,960
EBIT
$502,640
Interest expense
80,000
EBT
$422,640
Taxes (40%)
169,056
Net income
$253,584
Retained Earnings
$198,584
Dividends
$55,000
Balance Sheet
Last year
Current year
Last year
Current year
Liabilities and Equity
Cash
$7,282
$14,000
Accounts payable
$324,000
$359,800
Accounts receivable
652,160
$949,632
Notes payable
720,000
$300,000
Inventories
1,287,360
$1,716,480
Accruals
284,960
$380,000
Total current assets
$1,946,802
$2,680,112
Total current liabilities
$1,328,960
$1,039,800
Gross fixed assets
1,202,950
$1,220,000
Long-term debt
1,000,000
$500,000
Less: Accumulated depreciation
263,160
$383,160
Net fixed assets
$939,790
$836,840
Common stock (100,000 shares)
460,000
$1,680,936
Retained earnings
97,632
$296,216
Total equity
$557,632
$1,977,152
Total assets
$2,886,592
$3,516,952
Total liabilities and equity
$2,886,592
$3,516,952
Use the financial statements below to determine the CFO, CFF and CFI for the current year.
Income Statement (current year)
Sales
$7,035,600
Cost of goods sold
5,800,000
Depreciation
120,000
Other expenses
612,960
EBIT
$502,640
Interest expense
80,000
EBT
$422,640
Taxes (40%)
169,056
Net income
$253,584
Retained Earnings
$198,584
Dividends
$55,000
Balance Sheet
Last year
Current year
Last year
Current year
Liabilities and Equity
Cash
$7,282
$14,000
Accounts payable
$324,000
$359,800
Accounts receivable
652,160
$949,632
Notes payable
720,000
$300,000
Inventories
1,287,360
$1,716,480
Accruals
284,960
$380,000
Total current assets
$1,946,802
$2,680,112
Total current liabilities
$1,328,960
$1,039,800
Gross fixed assets
1,202,950
$1,220,000
Long-term debt
1,000,000
$500,000
Less: Accumulated depreciation
263,160
$383,160
Net fixed assets
$939,790
$836,840
Common stock (100,000 shares)
460,000
$1,680,936
Retained earnings
97,632
$296,216
Total equity
$557,632
$1,977,152
Total assets
$2,886,592
$3,516,952
Total liabilities and equity
$2,886,592
$3,516,952
Explanation / Answer
CFO (Cash flow from operations): Net Income 253584 Adjustments to net inocme to arrive at CFO: Depreciation 120000 Increase in accounts receivable (949632-652160) -297472 Increase in inventories (1716480-1287360) -429120 Increase in accounts payable (359800-324000) 35800 Increase in accruals (380000-284960) 95040 -475752 CFO -222168 CFI (Cash flow from investing): Purchase of fixed assets (1220000-1202950) -17050 CFI -17050 CFF (Cash flow from financing): Retirement of long term debt (1000000-500000) -500000 Sale of common stock (1680936-460000) 1220936 Retirement of notes payable (720000-300000) -420000 Payment of dividends -55000 CFF 245936 Increase in cash and cash equivalents 6718 Beginning balance of cash and cash equivalents 7282 Ending balance of cash and cash equivalents 14000