Question

Consider the following abbreviated financial statements for Barrie Enterprises: BARRIE Enterprises 2017 and 2018 Partial Statement of Financial Position Liabilities and Assets Owner's Equity 2017 2018 2017 2018 Current assets $ 946 $1,022 Current liabilities $ 381 $ 415 Net fixed assets 4,087 4,856 Long-term debt 2,151 2,293 BARRIE Enterprises 2018 Statement of Comprehensive Income Sales $ 13,200 Costs 5,541 Depreciation 1,193 Interest paid 326

Answer 1

Cash flow from Assets Cash flow from Assets $ OCF-Change in NWC-Net capital spending 3,506 =5510-42-1962 NWC 2018 Less: NWC 2017 $ $ 607 565 =1022-415 =946-381 Income Statement Sales $ 13,200 Less: Costs $ 5,541 Less: Depreciatior $ 1,193 EBIT $ 6,466 Less: Interest $ 326 EBT $ 6,140 Less: Tax @ 35% $ 2,149 Net income $ 3,991 $ 42 Operating cash flows Operating cash flows $ EBIT-Taxes+Depreciation Change in NWC 5,510 =6466-2149+1193 Net capital spending (NCS) Net capital spending (NCS) $ Increase in NFA + Depreciation 1,962 =(4856-4087)+1193 Debt retired Debt retired $ Beginning debt+New debt-Ending debt 268 =2151+410-2293 Cash flow to creditors (CFC) Cash flow to creditors $ Interest-New long term debt| 184 =326-2293-2151) C-2) Cash flow from assets $ $ $ 3,506 268 d-1) Debt retired d-2) Cash flow to creditors 184

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