Cusic Industries had the following operating results for 2015: sales = $28,560;
ID: 2815453 • Letter: C
Question
Cusic Industries had the following operating results for 2015: sales = $28,560; cost of goods sold = $19,460; depreciation expense = $5,020; interest expense = $2,340; dividends paid = $1,150. At the beginning of the year, net fixed assets were $16,980, current assets were $5,800, and current liabilities were $3,280. At the end of the year, net fixed assets were $20,360, current assets were $7,360, and current liabilities were $3,900. The tax rate for 2015 was 30 percent.
What was the cash flow from assets for 2015? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.)
If no new debt was issued during the year, what was the cash flow to creditors? (Do not round intermediate calculations.)
If no new debt was issued during the year, what was the cash flow to stockholders? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.)
Cusic Industries had the following operating results for 2015: sales = $28,560; cost of goods sold = $19,460; depreciation expense = $5,020; interest expense = $2,340; dividends paid = $1,150. At the beginning of the year, net fixed assets were $16,980, current assets were $5,800, and current liabilities were $3,280. At the end of the year, net fixed assets were $20,360, current assets were $7,360, and current liabilities were $3,900. The tax rate for 2015 was 30 percent.
Explanation / Answer
What was net income for 2015? (Do not round intermediate calculations.)
Net income before taxes
= sales - cost of goods sold - depreciation expense - interest expense
= $1,740
Tax = 30% of 1740 = 522
Operating Cash Flow = Net Income + Depreciation + Interest Expenses
= 1,218 + 5,020 + 2,340
= 8,578
Net Working Capital (Beginning)
= Current Asset - Current Liabilities
= 5,800 - 3,280
= 2,520
Net Working Capital (End)
= Current Asset - Current Liabilities
= 7,360 - 3,900
= 3,460
Change in Net working Capital
= Net Working Capital (End) - Net Working Capital (Beginning)
= 3,460 - 2,520
= 940
Net Capital Spending
= Net Fixed Assets (End) - Net Fixed Assets (beg) + Depreciation
= 20,360 - 16,980 + 5,020
= 8,400
Cash flow from assets
= Operating Cash Flow Change in Net Working Capital Net capital spending
= 8,578 - 940 - 8,400
= -762
Cash Flow to creditors = Interest - Net New LTD
= 2,340
Cash Flow to Stockholders = Cash flow from assets Cash flow to creditors
= -762 - 2,340
= -3,102
Net Income = $1,218Related Questions
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