Question

Rebecky's Flowers 4U, Inc., had free cash flows during 2021 of $41 million, NOPAT of $95 million, and depreciation of $25 million. Using this information, fill in the blanks on Rebecky's balance sheet below. (Enter your answers in millions of dollars.) 2021 2020 $ $ 17 $ Assets Current assets: Cash and marketable securities Accounts receivable Inventory Total 70 $ REBECKY'S FLOWERS 4U, INC. Balance Sheet as of December 31, 2021 and 2020 (in millions of dollars) 2021 2020 Liabilities and Equity Current liabilities: 38 $ 35 Accrued wages and taxes 100 90 Accounts payable 144 125 Notes payable 282 $ 250 Total Long-term debt: 570 $ 520 Stockholders' equity: 55 30 Preferred stock (5 million shares) 515 $ 490 Common stock and paid-in surplus (30 million shares) 50 50 Retained earnings 565 $ 540 Total 847 $ 790 Total liabilities and equity $ 325 $ 5 $ Fixed assets: Gross plant and equipment Less: Depreciation Net plant and equipment Other long-term assets Total Total assets $ 60 262 327 847 $ $ $ $ $ $ 290 790

Answer 1

Solution:-

Given,

Free flow of Cash = 41

Cash Flow from operating activities - Capital Expenditure = 41

Cash flow from operating activities - 50 ( Fixed Asset Purchased During the Year) = 41

Cash flow from operating activities = 50 + 41 = 91

Now,

NOPAT = 95

Add:- Non Cash items (depreciation) = 25

Add :- Increase in Current assets = 29

Less :- Increase in accrued Wages and Taxes    = -2

Less :- Increase in Account Payable (Balancing figure) = -56    ........(1)

Cash Flow from operating activities = 91

Cash Flow from investing activities (Purchase of fixed asset) = -50

Cash Flow from Financing activities (Balancing figure) = -38    ...........(2)

Net increase in cash and cash equivalents (38-35) = 3

Add :- Cash in the Beginning of the y = 35

Cash in the end of the year = 38

From (1) & (2)

Accounts payable = 90+56 = 146

Long term Debt = 325-38 = 287