W-Panic Enterprises, Inc. (WPEI) shows the following balance sheet and income st
ID: 2612358 • Letter: W
Question
W-Panic Enterprises, Inc. (WPEI) shows the following balance sheet and income statement information. Assume an average tax rate of 30% for WPEI.
Balance Sheet 2012 2013 Income Stmt. 2013
Assets Sales $18,000
Cash $1,120 $1,250 - Cost of Goods Sold -$9,800
Accts. Receivable $2,380 $2,900 - SG&A Expenses -$1,100
Inventory $800 $440 - Marketing Expenses -$1,000
Net Fixed Assets $5,500 $6,360 - Depreciation Exp. -$1,500
Liabilities Operating Income $4,600
Accounts Payable $1,600 $1,500 - Interest Exp. -$1,200
Taxes Payable $300 $850 Taxable Income $3,400
Long-term Notes $1,800 $1,250 - Tax Expense* -$850
Long-term Bonds $1,000 $1,450 Net Income $2,550
Owners’ Equity - Dividend Exp. -$2,750
Common Stock $4,000 $5,000
Retained Earnings $1,100 _ _ _ _
* the average tax rate is 25%
(a) Calculate Total Assets for 2012 and 2013. (b) Calculate Total Liab’s for 2012 and 2013. (c) Calculate Retained Earnings on the balance sheet for 2013. (d) Create the Statement of Cash Flows for 2013-all three contributing areas (Net Cash from Operarations;Net Cash from Investing Activities and Net Cash from Financing Activities.) Note: The Statement of CF is different from the CF from Assets, and CF to Creditors and Stockholders covered in Chptr 2.
Explanation / Answer
Ans
Details 2012 2013 Total Assets Total Assets Cash 1,120.00 1,150.00 Accounts Receivable 2,380.00 2,900.00 Inventory 800.00 440.00 Net Fixed Assets 5,500.00 6,360.00 9,800.00 10,850.00 Total Liabilities Total Liabilities 2,012.00 2,013.00 Accounts Payable 1,600.00 1,500.00 Tax Payable 300.00 850.00 Long TermNotes 1,800.00 1,250.00 Long Term Bonds 1,000.00 1,450.00 4,700.00 5,050.00 Retained Earnings Opening Balance 1,100.00 Add:Net Income 2,550.00 Less:Dividend 2,750.00 Ending Balance 900.00 Cash flow Statement Amount Amount Net Income 2,550.00 Add: Depreciation 1,500.00 Add: Tax Expense 850.00 Operating Profit Before Tax 4,900.00 less Tax Paid -300.00 Operating Profit Before WC changes 4,600.00 Increase in Accounts Receivable -520.00 Reduction in Accounts Payable -100.00 Reduction in inventory 360.00 -260 Cash flow from Operating activities 4,340.00 Purchase of Fixed Assets(6360-(5500-1500)) 2360 Cash flow used inInvesting activities -2360 Repayment of Long term notes -550 Issue of longetrm bond 450 Issue of Common Stock 1000 Dividend -2750 Net Cash used(From) financing activities -1850 Increase in cash and cash equivalents 130.00 Opening Cash 1,120.00 Closing Cash 1,250.00Related Questions
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