Problem 2-26 Calculating Cash Flow [LO4] Use the following information for Taco

Question

Problem 2-26 Calculating Cash Flow [LO4] Use the following information for Taco Swell, Inc., (assume the tax rate is 30 percent): 2014 2015 $21,073 $18,636 1,851 1,926 4,929 4,897 919 Sales Depreciation Cost of goods sold Other expenses Interest Cash Accounts receivable Short-term notes payable 1,360 Long-term debt Net fixed assets Accounts payable Inventory Dividends 1,041 890 1,02 6,352 7,036 8,230 9,997 1,337 20,890 25,111 51,306 58,120 4,688 5,214 14,606 15,478 1,9001,808 For 2015, calculate the cash flow from assets, cash flow to creditors, and cash flow to stockholders (Negative amounts should be indicated by a minus sign. Do not round intermediate calculation round your answers to 2 decimal places, e.g., 32.16.) s and Cash flow from assets Cash flow to creditors Cash flow to stockholders References eBook&Resources;

Explanation / Answer

1). Cash flow from assets = Net income + non-cash expenses - net change in working capital - net change in fixed assets.

For this we need to first calculate net income for 2015, which comes out = sales-COGS-depreciation-operating expenses - interest payment - taxes = $ 6911.1

net change in working capital = change in current assets - change in current liabilities = $ 2113.

net change in fixed assets = $6814.

cash flow from assets = 6911.1+ 1926 - 2113 - 6814 = - $89.9.

2). Cash flow to stockholders = dividends of 2015 = $1808.

3). Cash flow to credtors = interest paid - net borrowings = 1021 - (4198) = -$3177.

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