Dec.2004 Answer the following based on the information in the table : 1- After t

Question

Dec.2004

Answer the following based on the information in the table :

1- After tax cash flow from operations for 2004 *(no assets were disposed of during the year, and there was no change in interest payable or taxes payable).

a. $3,750

b. $3,375

c. $3,000

d. $2,250

2- Calculate the dividends paid in 2004 *(no assets were disposed of during the year, and there was no change in interest payable or taxes payable).

a. $3,750

b. $3,000

c. $750

d. $2.250

3- What is the amount of depreciation expense *(no assets were disposed of during 2004)

a. $375

b. $1,500

c. $2,625

d. $750

4- How much new common stock was issued during 2004 *(assuming that no common stock was repurchased

a. $750

b. $5,250

c. $1,500

d. $3,000

Financial Information Dec. 2003

Dec.2004

Net Income $1,500 $3,000 Accounts Receivable 750 750 Accum. Depreciation 1,125 1,500 Common Stock 4,500 5,250 Paid-in Capital 7,500 8,250 Retained earnings 1,500 2,250 Accounts Payabe 750 750

Explanation / Answer

Ans:- After tax cash flow from operations for 2004 = Net Income + Depreciation

= 3000 + (1500-1125)

= 3000 + 375

= 3375

Therefore, After tax cash flow from operations for 2004 = Option-B:-$ 3375

Ans:- Calculate the dividends paid in 2004 = Opening Retained Earnings + Net Income for the year

1. After tax cash flow from operations for 2004 *(no assets were disposed of during the year, and there was no change in interest payable or taxes payable).

Ans:- After tax cash flow from operations for 2004 = Net Income + Depreciation

= 3000 + (1500-1125)

= 3000 + 375

= 3375

Therefore, After tax cash flow from operations for 2004 = Option-B:-$ 3375

1. Calculate the dividends paid in 2004 *(no assets were disposed of during the year, and there was no change in interest payable or taxes payable).

Ans:- Calculate the dividends paid in 2004 = Opening Retained Earnings + Net Income for the year

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