Answer:
a. $838.28
b. $9,425.28
c. - $2042.72
d-1 $2,670
d-2 - $4,712.72
Explanation:
a. The computation of the net income is shown below:
= Sales - cost of good sold - depreciation expense - interest expense - income tax expense
= $33,510 - $23,820 - $5,917 - $2,670 - 264.72
= $838.28
The income tax expense
= ( $33,510 - $23,820 - $5,917 - $2,670 ) × 24%
= $264.72
b. The operating cash flow is shown below:
= EBIT + Depreciation - Income tax expense
where,
EBIT = Sales - cost of good sold - depreciation expense
= $33,510 - $23,820 - $5,917
= $3,773
And all other items would remain same
Now put these values to the above formula
So, the value would equal to
= $3773 + $5,917 - $264.72
= $9,425.28
c. Computation of the cash flow from assets for 2019 is shown below:
= Operating cash flow - net capital spending - changes in working capital
where, net capital capital = ending fixed assets - beginning fixed assets + depreciation
= $24,430 - $19,860 + $5,917
= $10,487
Changes in working capital = (ending balance of current assets - ending balance of current liabilities) - (beginning balance of current assets - beginning balance of current liabilities)
= ($8,636 - $4,601) - ($6,998 - $3,944)
= $4,035 - $3,054
= $981
Now put these values to the above formula
So, the value would equal to
= $9,425.28 - $10,487 - $981
= - $2042.72
d.1 The computation of the cash flow to creditors is shown below:
= Interest expense - ending balance of long term debt + beginning balance of long term debt
= $2,670 - 0 + 0
= $2,670
d.2 The computation of the cash flow to stockholder is shown below:
= Cash flow from asset - cash flow to creditors
= - $2042.72 - $2,670
= - $4,712.72
