Question

Use the financial statements below to determine the CFO, CFF and CFI for the current year....

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

Homework Answers

Answer #1
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
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