Titan Football Manufacturing had the following operating results for 2014: sales
ID: 2629858 • Letter: T
Question
Titan Football Manufacturing had the following operating results for 2014: sales = $19,900; cost of goods sold = $13,860; depreciation expense = $2,250; interest expense = $285; dividends paid = $670. At the beginning of the year, net fixed assets were $19,800, current assets were $3,060, and current liabilities were $1,950. At the end of the year, net fixed assets were $23,540, current assets were $3,520, and current liabilities were $2,040. The tax rate for 2014 was 35 percent.
Requirement 1: What is net income for 2014?
Requirement 2: What is the operating cash flow during 2014?
Requirement 3: What is the cash flow from assets during 2014?
What is the cash flow to creditors during 2014?
What is the cash flow to stockholders during 2014?
Titan Football Manufacturing had the following operating results for 2014: sales = $19,900; cost of goods sold = $13,860; depreciation expense = $2,250; interest expense = $285; dividends paid = $670. At the beginning of the year, net fixed assets were $19,800, current assets were $3,060, and current liabilities were $1,950. At the end of the year, net fixed assets were $23,540, current assets were $3,520, and current liabilities were $2,040. The tax rate for 2014 was 35 percent.
Requirement 1: What is net income for 2014?
Requirement 2: What is the operating cash flow during 2014?
Requirement 3: What is the cash flow from assets during 2014?
Requirement 4: Assume no new debt was issued during the year. (a)What is the cash flow to creditors during 2014?
(b)What is the cash flow to stockholders during 2014?
Explanation / Answer
1. Net income = (19,900-13,860-2,250-285)*(1-35%)= 2278.25
2. operating cash flow = = (19900-13860-2250)*(1-35%) + 2250-370= 4343.50
3. cash flow from assets= Operating cash flow
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