Consider the following abbreviated financial statements for Weston Enterprises W

Question

Consider the following abbreviated financial statements for Weston Enterprises WESTON ENTERPRISES 2013 and 2014 Partial Balance Sheets 2013 2014 3,9674,608 Assets Liabilities and Owners' Equity 2013 2014 $ 385 416 2,035 2,207 $ 950 $1,016 Current liabilities Current assets Net fixed assets Long-term debt WESTON ENTERPRISES 2014 Income Statement Sales Costs Depreciation Interest paid $12,530 5,990 1,080 200 a. What was owners' equity for 2013 and 2014? (Do not round intermediate calculations.) Owners' equity 2013 Owners' equity 2014

Explanation / Answer

a)

b)Working capital =Current assett -current liability

2014=1016-416=600

2013=950-385=565

change in NWC = 600-565 =35

C-1)Asset sold =Beginning net fixed asset+purchased-depreciation-ending Net fixed asset

3967+1885-1080-4608

=164

c-2)Net capital spending =ending Net fixed asset+depreciation-beginningFA

   =4608+1080-3967=1721

Operating cash flow =EBIT +depreciation-taxes

        = 5460+1080-1841

        =4699

Cash flow from asset =Operating cash flow -net capital spending-change in NWC

4699-1721-35

=2943

D-1)payoff =Beginning debt+borrowed -e nding

       =2035+410-2207

    =238

d-2)cash flow to creditors = Interest paid -[Ending debt -beginning debt]

   =200-[2207-2035].

= 200-172

= 28

2013 2014 Total asset 950+3967=4917 1016+4608=5624 Total liabiites 385+2035=2420 416+2207=2623 equity =Total asset -liability 2497 3001

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