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Cash flow from assets

Finance Sep 29, 2020

Cash flow from assets. Use the data from the following financial statements in the pos?up window, D. The company paid interest expense of $18,700 for 2014 and had an overall tax rate of 40% for 2014. Find the cash flow from assets for 2014, and break it into its three parts: operating cash flow, capital spending, and change in net working capital. The operating cash flow is $ (Round to the nearest dollar.) The capital spending is $. (Round to the nearest dollar) The change in net working capital is $ (Round to the nearest dollar) The cash flow from assets is $(Round to the nearest dollar)
Partial Income Statement Year Ending 2014 Sales revenue $350,000 Cost of goods sold $142,000 Fixed costs $42,800 Selling, general, and administrative expenses $28,000 Depreciation $46,100 Partial Balance Sheet 12/31/2013 ASSETS LIABILITIES Cash $14,100 $19,000 $190,100 Accounts receivable Inventories Fixed assets Accumulated depreciation Intangible assets $16,000 Notes payable $28,100 Accounts payable $48,000 Long-term debt $368,200 OWNERS' EQUITY $141,800 Retained earnings $82,200|Common stock $131,900 ASSETS Cash Accounts receivable Partial Balance Sheet 12/31/2014 LIABILITIES $25,900 Notes payable $18,800 Accounts payable $52,900 Long-term debt $12,200 $23,900 $161,900 Inventories

Expert Solution

Income Statement

Sales Revenue 3,50,000
Cost of goods sold (1,42,000)
Fixed Costs (42,800)
Selling, General and administrative expenses (28,000)
Depreciation (46,100)
EBIT 91,100
Interest (18,700)
EBT 72,400
Tax@40% (28,960)
Net Income 43,440

Operating cash flows= EBIT+ Depreciation - Taxes

=91100+46100-28960

=$1,08,240

Capital Spending is equal to Depreciation plus net increse in fixed assets. There are no new fixed assets purchased. So, capital spending will be equal to depreciation =$ 46,100

Change in working capital:

Decrease in Account Receivable = 9300

Increase in inventories = (4900)

Decrease in notes payable = (1900)

Increase in accounts payable = 4900

Decrease in Account Receivable(28100-18800)

9300
Increase in inventories (4800-52900) (4900)
Decrease in notes payable (14100-12200) (1900)
Increase in accounts payable(19000-23900) 4900
Total change in working capital $7400

Cash flow from assets= Operating cash fows- Change in working capital- Net capital spending

=108240-7400-46100

=$54,740

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