Question

USE THE FOLLOWING DATA TO ANSWER QUESTIONS 35-40 Annual Income Statements 2013 Sales 500,000 COGS ???? Gross profit 380,000 Oper. exp 225,000 Depreciation 15,000 Operating profit 140,000 Interest exp. 5,000 EBT 135,000 Taxes 50,000 Net Income 85,000 2014 560,000 149,350 410,650 250,100 15,000 145,550 5,000 140,550 56,000 84,550 2014 Cash Accounts rec Inventories Current Assets Net fixed assets Total Assets Annual Balance Sheets 2013 450,000 275,000 280.000 1,005,000 1.125.000 2,130,000 478,500 250,000 325,000 1,053,500 ??? 2,293,500 Notes payable Accounts payable Accruals Current Liabilities Long-term debt Common stock @ ($0.25 par) Additional paid in capital Retained earnings Total Liabilities & Equity 150,000 90,000 15,000 255,000 1,000,000 25,000 500,000 350,000 2,130,000 125,000 115,000 25,000 265,000 1,050,000 28,500 570,000 380,000 2,293,500 35. Net fixed assets in 2014 were S 36. COGS on the 2013 common-sized income statement was 24%. Therefore, COGS in 2013 was 37. The debt ratio for 2014 was %. 38. Cash flow from operations in 2014 was $ 39. Cash flow from investing in 2014 was $_ 40. Total dividends paid in 2014 was $

Answer 1

Answer to first 4 parts of the question: 35) Net fixed assets for 2014 - Total assets for 2014 - Total current assets for 2014 Total assets for 2014 Total current assets for 2014 Net fixed assets for 2014 $2,293,500 $1,053,500 $1,240,000 ($2293500 - $1053500) 36) COGS in 2013 = Sales for 2013 x COGS % in 2013 Sales for 2013 COGS % in 2013 COGS in 2013 $500,000 24% $120,000 ($500000 x 24%) 37) Debt ratio for 2014 = (Total liabilities for 2014 / Total assets for 2014) x 100 Total liabilities for 2014 Total assets for 2014 Debt ratio for 2014 $1,315,000 ($265,000+ $1,050,000] $2,293,500 57.34% [($1315000 / $2293500) x 100)

38) Cash flow from operations:: Net Income for 2014 $84,550 [Ref: Income Statement] Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Expense for 2014 $15,000 (Non-cash expense and so added back] Decrease in Accounts Receivables $25,000 ($275,000 - $250,000; Working capital decreases and so added] Increase in Inventories $45,000 ($280,000 - $325,000; Working capital increases and so deducted] Increase in Accounts Payable $25,000 ($115,000 - $90,000; Working capital decreases and so added] Increase in Accruals $10,000 ($25,000 - $15,000; Working capital decreases and so added] Net cash flow from operations in 2014 $114,550 NOTE: Cash balance in current assets is not taken up for calculating net cash flow from operations because change in cash balance between two years shall be analyzed via statement of cash flows for 2014. Change in Notes payable balance in current liabilities is not considered in the calculation because it relates to financing activities.