Irish Towing has sales of $543,449, COGS and SG&A totaling $185,731, depreciatio

ID: 2383883 • Letter: I

Question

Irish Towing has sales of $543,449, COGS and SG&A totaling $185,731, depreciation expense of $67,587, and taxes paid of $80,400. A partial listing of its balance sheet accounts is as follows:

Beginning Balance

Ending Balance

Current Assets

$131,700

$119,600

Net Fixed Assets

$712,500

$689,200

Current Liabilities

$108,900

$122,100

Long-Term Debt

$796,000

$830,500

What is the amount of Irish's cash flow from assets?

Beginning Balance

Ending Balance

Current Assets

$131,700

$119,600

Net Fixed Assets

$712,500

$689,200

Current Liabilities

$108,900

$122,100

Long-Term Debt

$796,000

$830,500

Explanation / Answer

Ans is 258331

Capital spending = Ending Net Fixed Assets - Beginning Net Fixed Assets + Depreciation

=$689,200-712,500+67,587 = 44287

Additions to Net Working Capital = Ending NWC - Beginning NWC = -2500-22800 =-25300

Ending NWC = Ending CA - Ending CL=119600-122100 = -2500

Beginning NWC = Beginning CA - Beginning CL =$131,700-$108,900 =22800

Cash Flow from Assets = Operating Cash Flow - Capital Spending - Additions to NWC

=277318-44287-( -25300) =258331

Irish Towing has sales of $543,449

543449

Less COGS and SG&A totaling $185,731

185731

Less Tax

80400

Operating Cash Flow (Assuming Depreciation is not included in COGS)

277318