During the year, Belyk Paving Co. had sales of $2,398,000. Cost of goods sold, a

Question

During the year, Belyk Paving Co. had sales of $2,398,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,427,000, $435,200, and $490,200, respectively. In addition, the company had an interest expense of $215,200 and a tax rate of 30 percent (ignore any tax loss carryback or carryforward provisions.). Belyk Paving Co. paid out $402,000 in cash dividends. Assume that net capital spending was zero, no new investments were made in net working capital, and no new stock was issued during the year. (Enter your answer as directed, but do not round intermediate calculations.) Required: Calculate the firm's new long-term debt added during the year. Long-term debt $

Explanation / Answer

Belyk Paving Co. All Amounts in $ Sales 2398000 Cost of Goods Sold 1427000 Gross Margin 971000 Administrative and Selling Expenses 435200 Depreciation Expense 490200 Interest Expense 215200 1140600 Net Loss before taxes -169600 Tax impact @ 30% -50880 Profit post taxes -220480 Cash Flow Statement Cash Flow from Operating Activities Profit post taxes -220480 Add : Income Tax -50880 Add : Depreciation 490200 Add : Interest 215200 654520 Cash Flow from Operating Activities 434040 Cash Flow from Financing Activities Interest paid -215200 Tax @ 30% 50880 Dividends paid -402000 -566320 Net Cash Outflow -132280 This should be the Long Term Debt raised additionally, given that there is no change in the Balance Sheet. Hence, the Long Term Debt raised is $ 132,280.

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.