Question

Use the following information for Taco Swell, Inc., (assume the tax rate is 21 percent): 2017 2018 Sales $ 19,049 $ 18,918 Depreciation 2,426 2,534 Cost of goods sold 5,940 6,781 Other expenses 1,378 1,203 Interest 1,135 1,350 Cash 8,701 9,397 Accounts receivable 11,538 13,632 Short-term notes payable 1,724 1,691 Long-term debt 29,210 35,354 Net fixed assets 72,884 77,760 Accounts payable 6,299 6,790 Inventory 20,509 21,912 Dividends 2,229 2,364 For 2018, calculate the cash flow from assets, cash flow to creditors, and cash flow to stockholders. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Answer 1

Cash Flow from Assets:

Ending Balance of Assets in 2017...........................................................$77760

Add: Depreciation........................................................................................$2534

Less: Beginning Balance of Assets.........................................................($72884)

CashOut  Flow ..................................................................................................$7410

Cash flow to creditors

Ending Balance of Creditors...................................................................$6790

Less: Beginning Balance of Creditors.................................................$6299

Less: Purchases (From Inventory)........................................................$8184

Cash Flow to AP............................................................................................$7693

Purchases from Inventory:

Ending Balance of Inventory....................................................$21912

Add: Cost of Goods Sold................................................................$6781

Less: Beginning Balance of Inventory.....................................($20509)

Purchases......................................................................................$8184

Cash flow to stock holders:

While Preparing Accounting Equation for 2017 as below:

Assets-Liabilities=Eq Shareholders

113632-37233=$76399

While Preparing Accounting Equation for 2018 as below:

Assets-Liabilities=Eq Shareholders

122701-43835=$78866

Net Income for 2018

Sales                                 18918

Less:  Dep                         (2534)

Less: COGS                       (6781)

Less:Other Exp                  (1203)

Less: Interest                     (1350)

Net Income before tax     7050

Less Tax..............................(1480)

Net Income.....................5569.5

Beginning Balance of Shareholders...................................................$76399

Add: Net income....................................................................................$5569.5

Less: Dividend.........................................................................................($2364)

Less: Ending Balance...........................................................................($78866)

Cash to Shareholders........................................................................$738