Below are Alpha LLC.\'s Balance Sheet, Income Statement and Marginal Tax Rate Ta

Question

Below are Alpha LLC.'s Balance Sheet, Income Statement and Marginal Tax Rate Table. Fill in the blanks.

(Hint: You need to use the Marginal Tax Rate Table to compute the firm's tax liability)

5,000

  4,500

18,333,334+

35

The Operating Cash Flow is .

The Net capital Spending is .

The Change in Net Working Capital is .

The Cash Flow From Asset is .

The Cash Flow to Creditors is .

The Cash Flow to Shareholders is .

PLease show all answer as step by step

Balance Sheet ($) 2013 2014   2013   2014 Current Assets Current Liabilities Cash 5,000 6,000 Account Payable 8,000   8,000 Account Receivable   10,000   15,000 Notes Payable

5,000

  4,500

Inventory   1,000   1,400 Total 13,000 Total 35,000 Long-Term Debts 23,500 24,000 Net Fixed Assets Net Plant and Equipment 63,500 70,500 Shareholders' Equity Total 63,500    Common Stock and Paid-in Surplus 40,500 38,000 Retained Earnings 11,500 Total Assets 88,500 105,500 Total Liabilities and Shareholders' Equity 105,500

Explanation / Answer

Answer:

1.Calculation showing Operating Cash Flow:

Operating Cash Flow = EBIT + Depreciation - Interest Expense

Hence, Operating Cash Flow = $ 58,160 (55000+5000-1840)

2.Calculation showing Net Capital Spending :

Net Capital Spending = Ending Fixed Assets - Beginning Fixed Assets + Depriciation

Therefore, Net Capital Spending = $ 12,000 (70500-63500+5000)

3.Calculation Showing Change in Net working Capital:

Change in working Capital = Current Assets - Current Liabilities

Therefore,

Change in Working Capital for 2013 = $ 3,000 (16000-13000) [b]

Change in Working Capital for 2014 = $ 22,500(35000-12500) [a]

Change in Net working Capital = Ending Net working Capital Beginning Net Working Capital

Hence, Changes in Net working Capital = $ 19,500 (a-b)

4.Calculation showing Cash Flow from Asset:

Cash Flow from Asset = Operating cash flow

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