1. The following information is available: For 2016, the cash flow from assets i

Question

1. The following information is available: For 2016, the cash flow from assets is _____ and the cash flow to stockholders is ______. A. $5,600; $300 B. $5,600; $15,100 C. $5,600; $14,500 D. $6,300; $300 E. $6,300; $14,500

Interest paid Long-tem debt Sales Common stock Accountspayable Depreciation Accounts receivable Inventory Other costs Taxes Cash Retained eamings Net fixed assets Cost ofgoods sold 20152016 $ 10,500 $ 11,400 287,400293,500 614,200 718,900 280,000 294,500 42,600 58,700 38,400 43,700 54,200 59,000 121,600128,300 46,800 42,100 16,100 20,200 9,500 6340000 18,200 89,800 481,400 539,700 471,100562,300

Explanation / Answer

Abswer: A) $5,600; $300

For 2016, the cash flow from assets is ___$5600__ and the cash flow to stockholders is ___$300___.

Working notes for the above answer is as under

2016 operating cash flow

= $718,900-562,300-42,100-20,200

= $94,300

Change in net working capital

= ($9,500 + 59,000 + 128,300 -58,700) - ($18,200 + 54,200 +121,600 -42,600)

= -$13,300

Net capital spending = $539,700-481,400 + 43,700 = $102,000

Cash flow from assets = $94,300-102,000 -(-$13,300) = $5,600

Cash flow from assets = $5,600

_____________________________________________________

Cash flow to creditors = $11,400- ($293,500-287,400) = $5,300

Addition to retained earnings = $89,800-65,400 = $24,400

Net income = $718,900-562,300-42,100 -43,700 -11,400 -20,200 = $39,200

Dividends paid = $39,200 - 24,400= $14,800

Cash flow to stockholders = $14,800-($294,500 -280,000) = $300

Cash flow to stockholders = $300

Cash flow from assets = $5,300 + 300 = $5,600

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