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    Calculating Owners' Equity, Net Working Capital, Fixed Assets, Long Term Debt, and Cash Flow to Creditors

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    Consider the following abbreviated financial statements for Parrothead Enterprises:

    PARROTHEAD ENTERPRISES
    2010 and 2011 Partial Balance Sheets
    Assets Liabilities and Owners' Equity
    2010 2011 2010 2011
    Current assets $ 954 $ 1,024 Current liabilities $ 390 $ 419
    Net fixed assets 3,857 4,616 Long-term debt 2,041 2,217

    PARROTHEAD ENTERPRISES
    2011 Income Statement
    Sales $ 12,720
    Costs 6,060
    Depreciation 1,080
    Interest paid 200

    a. What is owners' equity for 2010 and 2011?

    Owners' equity 2010 $
    Owners' equity 2011 $

    b. What is the change in net working capital for 2011?

    Change in NWC $

    c-1
    In 2011, Parrothead Enterprises purchased $1,895 in new fixed assets. How much in fixed assets did Parrothead Enterprises sell?

    Fixed assets sold $

    c-2
    In 2011, Parrothead Enterprises purchased $1,895 in new fixed assets. What is the cash flow from assets for the year? (The tax rate is 35 percent.)

    Cash flow from assets $

    d-1
    During 2011, Parrothead Enterprises raised $410 in new long-term debt. How much long-term debt must Parrothead Enterprises have paid off during the year?

    Debt retired $

    d-2
    During 2011, Parrothead Enterprises raised $410 in new long-term debt. What is the cash flow to creditors?

    Cash flow to creditors $

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    https://brainmass.com/math/consumer-mathematics/calculations-with-financial-statements-548218

    Solution Preview

    a.
    Total assets 2010 = $954 + 3,857 = $4,811
    Total liabilities 2010 = $390 + 2,041 = $2,431
    Owners' equity 2010 = $4,811 - 2,431 = $2,380

    Total assets 2011 = $1,024 + 4,616 = $5,640
    Total liabilities 2011 = $419 + 2,217 = $2,636
    Owners' equity 2011 = $5,640 - 2,636 = $3,004

    b.
    NWC 2010 = CA10 - CL10 = ...

    Solution Summary

    The following problem helps calculate owner's equity, net working capital, fixed assets, long-term debt and cash flow to creditors.

    $2.19

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