Jetson Spacecraft Corp. shows the following information on its 2011 income state

Question

Jetson Spacecraft Corp. shows the following information on its 2011 income statement: sales = $242,000; costs = $153,000; other expenses = $7,900; depreciation expense = $17,700; interest expense = $14,100; taxes = $17,255; dividends = $11,000. In addition, you’re told that the firm issued $5,600 in new equity during 2011 and redeemed $4,100 in outstanding long-term debt.

a. What is the 2011 operating cash flow? Operating cash flow $

b. What is the 2011 cash flow to creditors? Cash flow to creditors $

c. What is the 2011 cash flow to stockholders? Cash flow to stockholders $

d. If net fixed assets increased by $22,000 during the year, what was the addition to NWC? Addition to NWC $

Explanation / Answer

Income Statement $ Sales 242000 Cost of sales 153000 other Expenses 7900 Depreciation 17700 Interest expenses 14100 Net profit before taxation 49300 Less: tax 17255 Net income 32045 Dividend 11000 Ans a Assuming all are cash transactions as no other information given Cash from operating activities $ Received from Customers 242000 Payment of Cost of sales -153000 Payment of other Expenses -7900 Payment of Interest -14100 Payment of Dividend -11000 Payment of Taxes -17255 Net Cash from operating activities 38745 Ans b Cash Flow to creditors Payment of Cost of sales $153,000 Ans c Cash Flow to Stockholders Issue of share capital ($5,600) Dividend received 11000 Cash Flow to Stockholders $5,400 Ans d Addition to Fixed Assets Net Fixed asset $22,000 Add: depreciation $17,700 Fixed Asset at cost $39,700

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