Consider the following abbreviated financial statements for 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
2011 Income Statement
Sales $ 12,720
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 $
In 2011, Parrothead Enterprises purchased $1,895 in new fixed assets. How much in fixed assets did Parrothead Enterprises sell?
Fixed assets sold $
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 $
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 $
During 2011, Parrothead Enterprises raised $410 in new long-term debt. What is the cash flow to creditors?
Cash flow to creditors $© BrainMass Inc. brainmass.com October 25, 2018, 8:40 am ad1c9bdddf
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
NWC 2010 = CA10 - CL10 = ...
The following problem helps calculate owner's equity, net working capital, fixed assets, long-term debt and cash flow to creditors.
Finance: total current assets, net fixed assets, retained earnings balance, cash flow
23. Winslow Enterprises has total assets of $11,700, net working capital of $1,400, owner's equity of $5,000 and long-term debt of $3,500. What is the value of the current assets?
24. Gladstone, Inc., has net working capital of $4,300, long-term debt of $8,200, total debt of $10,100, and owners' equity of $12,000. What is the value of Gladstone's net fixed assets?
25. Fields and Flowers had beginning retained earnings of $63,100. During the year, the company reported sales of $127,800, costs of $89,900, depreciation of $11,200, dividends of $2,800, and interest paid of $3,400. The tax rate is 35%. What is the retained earnings balance at the end of the year?
26. Grunzel Potters, Inc., has net working capital of $2,100, net fixed assets of $23,600, current liabilities of $1,800, and long-term debt of $14,700. What is the value of the shareholders' equity?
27. Michaela's has cash of $900 and accounts receivable of $1,300. The inventory cost $4,200 and can be sold today for $6,100. The fixed assets were purchased at a cost of $42,800 of which $18,300 has been depreciated. The fixed assets can be sold today for $19,500. What is the total book value of the assets of Michaela's?
28. The financial statements of Bruce's Antiques reflects cash of $21,300, collectible accounts receivable of $37,700, accounts payable of $45,900, inventory of $63,300, long-term debt of $80,000, and net fixed assets of $123,400. The firm estimates that if they wanted to cease operations today that they could sell the inventory for $48,000 and the fixed assets for $99,000. What is the market value of the assets?
29. Buster's Brooms owes $36,485 in tax on a taxable income of $136,500. The company has determined that they will owe $38,435 in tax if their taxable income rises to $141,500. What is the marginal tax rate at this level of income?
30. Winston and Sons, Inc., has an operating cash flow of $141,200, depreciation expense of 89,300, and taxes paid of $76,100. A partial listing of their balance sheet accounts is as follows:
Beginning Balance Ending Balance
Current assets $146,800 $132,700
Net fixed assets $989,400 $909,400
Current liabilities $121,600 $138,700
Long-term debt $888,000 $862,500
What is the amount of Winston and Sons' cash flow from assets?
31. Bruceton Enterprises has net sales of $982,500 and costs of $789,100. The depreciation expense is $124,700 and the interest paid is $23,100. What is the amount of the firm's operating cash flow if the tax rate is 34 percent?
32. The Jones Brothers paid $123,600 in interest over the year, along with $88,000 in dividends. The company issued $130,000 of stock and $50,000 of new debt. During the year, the company reduced the balance due on the old debt by $435,000. What is the amount of the cash flow to creditors for the year?
33. Eight months ago, the ABC Co. repurchased $125,000 of its common stock. The company pays regular dividends totaling $24,000 per quarter. What is the amount of the cash flow to stockholders for the past year?View Full Posting Details