1. Griffins Goat Farm, Inc., has sales of $668,000, costs of $330,000, depreciat

Question

1. Griffins Goat Farm, Inc., has sales of $668,000, costs of $330,000, depreciation expense of $74,000, interest expense of $47,000, a tax rate of 21 percent, and paid out $46,000 in cash dividends. The firm has 27,400 shares of common stock outstanding.

What are the earnings per share figure? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

What are the dividends per share figure? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

2.

Pompeii, Inc., has sales of $47,500, costs of $22,000, depreciation expense of $2,000, and interest expense of $1,750.

If the tax rate is 23 percent, what is the operating cash flow, or OCF? (Do not round intermediate calculations.)

3.

Logano Driving School’s 2017 balance sheet showed net fixed assets of $4 million, and the 2018 balance sheet showed net fixed assets of $4.2 million. The company’s 2018 income statement showed a depreciation expense of $350,000.

What was net capital spending for 2018? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

1. Griffins Goat Farm, Inc., has sales of $668,000, costs of $330,000, depreciation expense of $74,000, interest expense of $47,000, a tax rate of 21 percent, and paid out $46,000 in cash dividends. The firm has 27,400 shares of common stock outstanding.

Explanation / Answer

1a)

Income before tax = sales -expense

= 668000-330000-74000-47000=217000

Income after tax = Income before tax [1-tax]

           = 217000[1-.21]

         = 171430

a)Earning per share =Net income /share outstanding

            = 171430 / 27400

           = $ 6.26 per share

b)Dividend per share=dividend /share outstanding

         = 46000/27400

         = $ 1.68 per share

2)Income before tax = 47500-22000-2000-1750=21750

Income after tax = 21750[1-.23] = 16747.5

OCF =Income after tax +depreciation(non cash)

= 16747.5+2000.

= 18747.5

3)Net capital spending = Net fixed asset at end- net fixed asset at beginning +depreciation

        = 4,200,000 -4,000,000 + 350,000

       = 550000

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