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Homework answers / question archive / Cash flow from assets
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
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
