Answer:
a $1,091.22
b $9,798.22
c - $1,709.78
d-1 $2,710
d-2 - $4,419.78
Explanation:
a. The computation of the net income is shown below:
= Sales - cost of good sold - depreciation expense - interest expense - income tax expense
= $34,318 - $24,212 - $5,997 - $2,710 - $307.78
= $1,091.22
The income tax expense
= ($34,318 - $24,212 - $5,997 - $2,710) × 22%
= $307.78
b. The operating cash flow is shown below:
= EBIT + Depreciation - Income tax expense
where,
EBIT = Sales - cost of good sold - depreciation expense
= $34,318 - $24,212 - $5,997
= $4,109
And all other items would remain same
Now put these values to the above formula
So, the value would equal to
= $4,109 + $5,997 - $307.78
= $9,798.22
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
= $24,502 - $19,940 + $5,997
= $10,559
Changes in working capital = (ending balance of current assets - ending balance of current liabilities) - (beginning balance of current assets - beginning balance of current liabilities)
= ($8,684 - $4,673 ) - ($7,054 - $3,992)
= $4,011 - $3,062
= $949
Now put these values to the above formula
So, the value would equal to
= $9,798.22 - $ $10,559 - $949
= - $1,709.78
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
= $2,710 - 0 + 0
= $2,710
d.2 The computation of the cash flow to stockholder is shown below:
= Cash flow from asset - cash flow to creditors
= - $1,709.78 - $2,710
= - $4,419.78
