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3 years ago

Consider the following financial statements about DANIEL Co. for the current year 2015

Business

1 answer:

neonofarm [45]3 years ago

4 0

Answer:

a. For the Year Ended December 31, 2015

Cash flows from operating activities:

Cash received from customers 15586

Cash paid to suppliers -10260

Cash paid for operating expenses -3910

Cash paid for interest -220

Cash paid for income taxes -560

Net cash flow from operating activities 636

<u>Working: </u>

Sales 16000

Less: Increase in accounts receivable -380

Less: Decrease in unearned revenue -34

Cash received from customers 15586

Cost of goods sold 10000

Add: Decrease in accounts payable 360

Less: Decrease in inventory -100

Cash paid to suppliers 10260

Operating expenses 4000

Less: Noncash expenses

Depreciation expense -150

Impairment loss -200

Cash operating expenses 3650

Add: Increase in prepaid expenses 80

Add: Decrease in accrued liabilities 180

Cash paid for operating expenses 3910

Interest expense 200

Add: Decrease in interest payable 20

Cash paid for interest 220

Income tax expense 600

Less: Increase in income tax payable -40

Cash paid for income taxes 560

(b) Partial Cash Flow Statement (Indirect Method)

For the Year Ended December 31, 2015

Cash flows from operating activities

Net income 1200

Adjustments to reconcile net

income to operating cash flows:

Depreciation expense 150

Impairment loss 200

Increase in accounts receivable -380

Decrease in inventory 100

Increase in prepaid expenses -80

Decrease in accounts payable -360

Decrease in accrued liabilities -180

Decrease in interest payable -20

Decrease in unearned revenue -34

Increase in income tax payable 40 -564

Net cash flow from operating activities 636

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D) productive efficiency and allocative efficiency but not necessarily equity.

Explanation:

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3 years ago

Compensation for your employer over and above your income describes:

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The compensation that can be provided to the employer over and above employee's income could be an Insurance payment or accumulated Tax refund.

<h3>What is Insurance?</h3>

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3 years ago

Gilberto's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Gilberto's very tiny kitchen has ba

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Answer:

However, Gilberto's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Gilberto lets them know how many workers he needs for each day of the week. In the short run, these workers are <u>VARIABLE</u> inputs, and the ovens <u>FIXED</u> inputs.

Explanation:

In the long run, all inputs are variable. E.g. in 5 years Gilberto might build his own pizza place and he will be able to make the kitchen as large as he wants.

But in the short run, some inputs are variable because they can be changed immediately, e.g. the number of workers changes on a weekly basis. While other inputs are fixed, and cannot be changed, e.g. Gilberto has a two yer lease contract for the ovens, so he will continue to use these ovens until the lease expires (in 2 years).

The long run and short doesn't depend on time, but on the ability of being able to change the inputs consumed by a business. The long run might represent 10 years for a company that signed a 10 year lease contract.

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3 years ago

Green Caterpillar Garden Supplies Inc.'s income statement reports data for its first year of operation. The firm's CEO would lik

sergeinik [125]

Answer:

Green Caterpillar Garden Supplies Inc.

a) Income Statement for Year Ending December 31

Year 1 Year 2 (Forecasted)

Net sales $30,000,000 $37,500,000

Less: Operating costs 19,500,000 24,375,000

Depreciation &amortization expenses 1,200,000 1,200,000

Operating income (or EBIT) $9,300,000 $11,925,000

Less: Interest expense 930,000 1,788,750

Pre-tax income (or EBT) 8,370,000 10,136,250

Less: Taxes (40%) 3,348,000 4,054,500

Earnings after taxes $5,022,000 $6,081,750

Less: Preferred stock dividends 100,000 100,000

Earnings to common shareholders 4,922,000 5,981,750

Less: Common stock dividends 2,008,800 2,432,700

Contribution to retained earnings $2,913,200 $3,549,050

b) In Year 2, if Green Caterpillar has 5,000 shares of preferred stocks issued and outstanding, then each preferred share should expect to receive _ $20 _ in annual dividends.

-If Green Caterpillars has 400,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from _ $12.31 _ in Year 1 to _ $14.95 _ in Year 2.

-Green Caterpillar's before interest, taxes, depreciation and amortization (EBITDA) value changed from _ $10,500,000 _ in Year 1 to _ $13,125,000_ in Year 2.

-It is _ wrong _ to say that Green Caterpillar's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, $2,913,200 and $3,549,050, respectively. This is because _ not all_ of the items reported in the income statement involve payments and receipts of cash.

Explanation:

a) The preferred dividend per share = Preferred Dividends divided the number of preferred stock shares.

b) The EPS is the Earnings Per Share and is calculated as Net Income to Common Stockholders divided by the number of common stock shares outstanding.

The operating cost figure may not be based on a cash basis. It could be accrued costs. Similarly, the net sales may as well involve sales on credit, which do not involve cash flows.

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