Randy Jackson owns a pet shop in nearby St. Louis, MO where he sells puppies to
ID: 2778829 • Letter: R
Question
Randy Jackson owns a pet shop in nearby St. Louis, MO where he sells puppies to aspiring recording artists. Randy’s pet shop, Dawg Town, Inc, showed the following information on its 2015 income statement:
• Sales of $196,000
• Costs of $104,000
• Other Expenses of $6,800
• Depreciation Expense of $9,100
• Interest Expense of $14,800
• Taxes of $21,455
• Dividends of $10,400
To capitalize on his recent success, Randy expanded Dawg Town, Inc in 2015. In doing so, the balance of net fixed assets increased by $52,203. To finance this, they issued $5,700 in new equity and $7,300 in long-term debt.
What was the change in net working capital during 2015 for Dawg Town, Inc? Hint: You will have to use the cash flow identity to find the components of cash flow from assets
Explanation / Answer
Working Note
Cash Flow Operating Activities Sales 196000 Less: Cost 104000 Less: Other Expense 6800 Less: Tax 21455 Operating Cash Flow 63745 Cash Flow Investing Activities Capital Spending (W.Note) -61303 Cash Flow Investing Activities -61303 Cash Flow Financing Activities Equity 5700 Long Term Debt 7300 Cash Flow Financing Activities 13000 Change in Working Capital: (63745-61303+13000) 15442Related Questions
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