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Question: 1 company abc has sales of 1850000 cost of goods...

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1. Company ABC has sales of $1,850,000, cost of goods sold of $1,000,000, EBIT of $350,000, interest expense of $65,000, and a tax rate of 27%. If the company paid $51,000 in dividends what is the addition to retained earnings.

2. Nitro Enterprise had beginning net fixed assets of $218,470 and ending net fixed assets of $209,411. During the year, assets with a combined book value of $6,943 were sold. Depreciation for the year was $42,822. What is the amount of net capital spending?

3. Use the Income Statement and Balance Sheet below to calculate the companies free cash flow.

Income Statement

2017

Net Sales

675

Cost of goods sold

210

Depreciation

50

EBIT

415

Interest Paid

15

EBT

400

Taxes (30%)

120

Net Income

280

Dividends

105

Addition to Retained Earnings

175

Assets

2016

2017

Liabilities and Shareholders equity

2016

2017

Current Assets

Current Liabilities

Cash

100

125

Accounts Payable

200

250

Accounts Receivable

250

350

Notes Payable

150

225

Inventory

400

375

Total Current Assets

750

850

Total Current Liabilities

350

475

Long term debt

300

250

Fixed Assets

Stockholders equity

PPE

1500

1700

Common stock

300

300

Accumulated Depreciation

400

450

Retained earnings

900

1075

Net PPE

1100

1250

Total Shareholder’s Equity

1200

1375

Total Assets

1850

2100

Total Liabilities & Equity

1850

2100

4.  A firm has net working capital of $700. Long-term debt is $5,000, total assets are $7,800, and fixed assets are $3,850. What is the amount of the total liabilities?

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