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Table 29.11 shows Dynamic Mattress?s year-end 2016 balance sheet, and Table 29.12 shows its income statement for

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Table 29.11 shows Dynamic Mattress?s year-end 2016 balance sheet, and Table 29.12 shows its income statement for 2017. Work out the statement of cash flows for 2017. Group these items into sources of cash and uses of cash.

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Balance Sheet (year-end) 2016 2017 Assets: 20.0 Cash 29.0 Marketable Securities 10.0 0.0 Accounts Receivable 110.0 124.0 Inventory 100.0 183.0 249.0 Total Current Assets 327.0 Fixed Assets: Property, Plant and Equ 330.0 345.0 hent 76.5 Less: Accumulated Depreciation 70.0 Net Fixed Assets: 260.0 268.5 509.0 Total Assets: 595.5 Liabilitles and Equity: 25.0 20.0 Bank Loans Accounts Payable 75.0 110.0 Total Current Liabilites 95.0 135.0 Long Term Debt 25.0 60.0 389.0 400.5 Shareholder's Equity Total Liability and Shareholder's Equity: 509.0 595.5 Sales $1,500 Operating costs 1,405 $ 95 Depreciation 6.5 $ 88.5 Interest Pretax income $ 83.5 Tax at 50% 41.8 Net income $ 41.8

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The recreated financial statements appear on the following FY2017 and FY2018 Financial Statements Dy...View the full answer


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Mugdha Sisodiya
My self Mugdha Sisodiya from Chhattisgarh India. I have completed my Bachelors degree in 2015 and My Master in Commerce degree in 2016. I am having expertise in Management, Cost and Finance Accounts. Further I have completed my Chartered Accountant and working as a Professional. Since 2012 I am providing home tutions.
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Principles of Corporate Finance

Principles of Corporate Finance

ISBN: 978-1260013900

13th edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen

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Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.

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