Problem 12-8 Financing Deficit Stevens Textile\'s 2013 financial statements are
ID: 2625467 • Letter: P
Question
Problem 12-8
Financing Deficit
Stevens Textile's 2013 financial statements are shown below:
Balance Sheet as of December 31, 2013 (Thousands of Dollars)
Income Statement for December 31, 2013 (Thousands of Dollars)
Cash $ 1,080 Accounts payable $ 4,320 Receivables 6,480 Accruals 2,880 Inventories 9,000 Line of credit 0 Total current assets $16,560 Notes payable 2,100 Net fixed assets 12,600 Total current liabilities $ 9,300 Mortgage bonds 3,500 Common stock 3,500 Retained earnings 12,860 Total assets $29,160 Total liabilities and equity $29,160Explanation / Answer
2. Notes payable =2,100.00 +4,188= $6288
2013 2014 Sales $36,000 $45,000.00 Operating costs 32,440 $40,550.00 Earnings before interest and taxes $3,560 $4,450.00 Interest 460 504 Pre-tax earnings $3,100 $3,946.00 Taxes (40%) 1,240 $1,578.40 Net income $1,860 $2,367.60 Dividends (45%) $837.00 $1,065.42 Addition to retained earnings $1,023 $1,302.18 2013 2014 2013 2014 Cash $1,080 $1,350.00 Accounts payable $4,320 $5,400.00 Receivables 6,480 $8,100.00 Accruals 2,880 $3,600.00 Inventories 9,000 $11,250.00 Line of credit 0 $0.00 Total current assets $16,560 $20,700.00 Notes payable 2,100 $2,100.00 Net fixed assets 12,600 $15,750.00 Total current liabilities $9,300 $11,100.00 Mortgage bonds 3,500 3,500 Common stock 3,500 3,500 Retained earnings 12,860 $14,162 Total assets $29,160 $36,450.00 Total liabilities and equity $29,160 $32,262 Total assets $36,450 AFN 36450-32262 $4,188