Question

Consider the following abbreviated financial statements for Cabo Wabo, Inc.: CABO WABO, INC. Partial Balance Sheets as of December 31, 2018 and 2019 2018 2019 2018 2019 Assets Liabilities and Owners' Equity Current assets $3,025 $3,213 Current liabilities $ 1,315 $ 1,938 Net fixed assets 13,906 14,497 Long-term debt one 7,209 8,265 CABO WABO, INC. 2019 Income Statement Sales 44,790 22,452 Costs Depreciation 3.801 Interest paid 1,023 b. What is owners' equity for 2018 and 2019? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) What is the change in net working capital for 2019? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) C-1. In 2019, the company purchased $7,912 in new fixed assets. The tax rate is 24 percent. How much in fixed assets did the company sell? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) C-2. What is the cash flow from assets for the year? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) d-1. During 2019, the company raised $2,395 in new long-term debt. What is the cash flow to creditors? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) d-2. How much long-term debt must the company have paid off during the year? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) 2018 Owners' equity 2019 Owners' equity Change in net working capital C-1. Fixed assets sold c-2. Cash flow from assets d-1. Cash flow to creditors d-2. Debt retired

Answer 1

OCF-Change in NWC-Net capital spending $ 8,407 $ 7,507 Owners' equity 2018 Income Statement Cash flow from Assets 3025+13906-1315-7209 Sales $ 44,790 Cash flow from Assets $ Owners' equity 2019 14,178 -3213+14497-1938-8265 $22,452 Less -18135-(-435)-4392 Costs Less: Depreciation $3,801 $ 18,537 $ 1,023 $ 17,514 $ 4,203 Operating cash flows Operating cash flows $1,275 EBIT-Taxes+Depreciation NWC 2019 3213-1938 EBIT $ 1,710 Less: Interest Less: NWC 2018 -3025-1315 18,135 ЕВT -18537-4203+3801 Less: Tax 24% Change in NWC -$435 Net capital spending (NCS) Net capital spending (NCS) Increase in NFA + Depreciation $13,311 Net income 4,392 - (14497-13906)+3801 Fixed assets bought - Net capital spending Fixed assets sold Fixed assets sold 3,520 =7912-4392 Debt retired Beginning debt+New debt-Ending debt Debt retired 1,339 =7209+2395-8265 Interest-New long term debt -$33.00 Cash flow to creditors (CFC) Cash flow to creditors -1023-(8265-7209) 8,407 a) Owners' equity 2018 7,507 -$435 3,520 14,178 -$33 1,339 Owners' equity 2019 b) Change in NWC c-1) Fixed assets sold c-2) Cash flow from assets d-1) Cash flow to creditors d-2) Debt retired

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