Cardinal Industries had the following operating results for 2018: Sales = $33,51
ID: 2815783 • Letter: C
Question
Cardinal Industries had the following operating results for 2018: Sales = $33,510; Cost of goods sold = $23,820; Depreciation expense = $5,917; Interest expense = $2,670; Dividends paid = $1,924. At the beginning of the year, net fixed assets were $19,860, current assets were $6,998, and current liabilities were $3,944. At the end of the year, net fixed assets were $24,430, current assets were $8,636, and current liabilities were $4,601. The tax rate for 2018 was 24 percent.
Cardinal Industries had the following operating results for 2018: Sales = $33,510; Cost of goods sold = $23,820; Depreciation expense = $5,917; Interest expense = $2,670; Dividends paid = $1,924. At the beginning of the year, net fixed assets were $19,860, current assets were $6,998, and current liabilities were $3,944. At the end of the year, net fixed assets were $24,430, current assets were $8,636, and current liabilities were $4,601. The tax rate for 2018 was 24 percent.
Explanation / Answer
a. Net Income
= Sales - COGS - Depreciation - Interest - Dividends - Tax
= 33510 - 23820 - 5917 - 2670 - 1924
= (821) - Tax @24%
= (1018.04)
b. Operating Cash flow
= Sales - COGS - Interest - Dividends
= 5096
c. Cash flow from assets
Current Assets
Opening + Sales (AR) - Closing (Assumed that all sales are on credit)
= 6998 + 33510 - 8636
= $ 31,872
Fixed Assets
Opening - Depreciation - Closing
= 19860 - 5917 - 24430
= ($10,487)
Total Assets = $ 21,385
d-1 Cash flow to creditors
= Opening + COGS (Purchase) - Closing
= 3944 + 23820 - 4601
= $23,163
d-2 Cash flow to stockholders
= Sales - COGS - Depreciation - Dividends - Tax
= $1,405.24
= 1,405.24 + Dividends
= 3,329.24