ABC Inc. has a net income of $2,000 and falls in the 21% tax rate. The firm made an interest payment of $400 during the year and the depreciation for the year was $500. During the year, the net fixed assets increased by $1000. Cash decreased by $100, inventories decreased by $50, receivables increased by $100, payables declined by $125, and the short term debt for the company increased by 200. The firm saw its common stock and paid in surplus decrease by $500. The firm pays out half its earnings as dividends.
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