Question

Randy Jackson owns a pet shop in nearby St. Louis, MO where he sells puppies to aspiring recording artists. Randy’s pet shop, Dawg Town, Inc, showed the following information on its 2015 income statement:

• Sales of $196,000
• Costs of $104,000
• Other Expenses of $6,800
• Depreciation Expense of $9,100
• Interest Expense of $14,800
• Taxes of $21,455
• Dividends of $10,400

To capitalize on his recent success, Randy expanded Dawg Town, Inc in 2015. In doing so, the balance of net fixed assets increased by $46,025. To finance this, they issued $5,700 in new equity and $7,300 in long-term debt.

What was the change in net working capital during 2015 for Dawg Town, Inc? Hint: You will have to use the cash flow identity to find the components of cash flow from assets

Answer 1