Quarles Industries had the following operating results for 2015: sales = $28,860; cost of goods sold = $19,510; depreciation expense = $5,060; interest expense = $2,340; dividends paid = $1,200. At the beginning of the year, net fixed assets were $17,130, current assets were $5,810, and current liabilities were $3,320. At the end of the year, net fixed assets were $20,410, current assets were $7,360, and current liabilities were $3,930. The tax rate for 2015 was 34 percent. |
a. | What is net income for 2015? (Do not round intermediate calculations.) |
Net income | $ 1287 |
b. | What is the operating cash flow for 2015? (Do not round intermediate calculations.) |
Operating cash flow | $ 8687 |
c. | What is the cash flow from assets for 2015? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.) |
Cash flow from assets | $ |
d-1 |
If no new debt was issued during the year, what is the cash flow to creditors? (Do not round intermediate calculations.) |
Cash flow to creditors | $ 2340 |
d-2 |
If no new debt was issued during the year, what is the cash flow to stockholders? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.) |
Cash flow to stockholders | $ |
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Quarles Industries | ||
Answer a | ||
Income Statement | Amount $ | |
Sales Revenues | ||
Sales Revenues | 28,860.00 | |
Less: Sales discounts | - | |
Net Sales | 28,860.00 | |
Cost of goods sold | 19,510.00 | |
Gross Profit | 9,350.00 | |
Less: Expenses | ||
Depreciation expense | 5,060.00 | |
EBIT | 4,290.00 | |
Interest expense | 2,340.00 | |
EBT | 1,950.00 | |
Less: Income tax | 663.00 | |
Net Income | 1,287.00 | |
Answer b | ||
Operating cash flow for 2015 | Amount $ | |
Particulars | ||
EBIT | 4,290.00 | |
Add: Depreciation | 5,060.00 | |
Less: Income Tax | 663.00 | |
Operating cash flow for 2015 | 8,687.00 | |
Answer c | ||
Cash flow from assets for 2015 | ||
Change in Net working capital (NWC) | NWCend- NWCbeg | |
Change in Net working capital | (CAend- CLend)- (CAbeg- CLbeg) | |
Change in Net working capital | (7360- 3930)- (5810- 3320) | |
Change in Net working capital | $ 940.00 | |
Net capital spending | Net Fixed Assets end- Net Fixed Assets beg+ Depreciation | |
Net capital spending | $ 20,410- $ 17,130 + $ 5,060 | |
Net capital spending | $ 8,340.00 | |
Cash flow from assets for 2015 | Operating cash flow for 2015- Change in Net working capital- Net capital spending | |
Cash flow from assets for 2015 | $ (593.00) | |
Answer d-1 | ||
Cash flow to creditors | ||
Cash flow to creditors | Interest payment- net loan payments | |
Cash flow to creditors | 2340-0 | |
Cash flow to creditors | $ 2,340.00 | |
Answer d-2 | ||
Cash flow to stockholders | Dividends- Net New Equity | |
Net New equity | Cash flow from assets- Cash flow to creditors | |
Net New equity | -593- 2340 | |
Net New equity | $ (2,933.00) | |
Cash flow to stockholders | 1200-(-2933) | |
Cash flow to stockholders | $ 4,133.00 |
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