2020 2021 Cost of goods sold $306,726 $387,290 Cash 44,261 66,870 Depreciation 86,590 97,871 Interest expense 18,824 21,576 Selling and administrative 60,322 78,732 Accounts payable 31,423 53,181 Net fixed assets 382,014 465,426 Sales 601,729 733,469 Accounts receivable 31,363 40,681 Notes payable 35,654 38,929 Long-term debt 192,827 210,408 Inventory 60,382 81,209 New equity 0 23,400 Sunset Boards currently pays out 40 percent of net income as dividends to Tad and the other original investors, and it has a 21 percent tax rate. You are Christina's assistant, and she has asked you to prepare the following: 1. An income statement for 2020 and 2021. 2. A balance sheet for 2020 and 2021. 3. Operating cash flow for each year. 4. Cash flow from assets for 2021. 5. Cash flow to creditors for 2021. 6. Cash flow to stockholders for 2021. QUESTIONS 1. How would you describe Sunset Boards's cash flows for 2021? Write a brief discussion 2. In light of your discussion in the previous question, what do you think about Tad's expansion plans? D 1 Construct the income statements. Year Income Statement Sales Cost of goods sold Selling & Administrative Depreciation EBIT Interest EBT Taxes Net income Dividends Addition to retained earnings Income Statement Year Sales Cost of goods sold Selling & Administrative Depreciation EBIT Interest Construct the balance sheets. Balance sheet as of Dec. 31. Year Cash Accounts receivable Inventory Current assets Accounts payable Notes payable Current liabilities Net fixed assets Total assets Long-term debt Owners' equity Total liab. & equity Balance sheet as of Dec. 31. Year Cash Accounts receivable Inventory Current assets Accounts payable Notes payable Current liabilities Long-term debt Owners' equity Total liab. & equity Net fixed assets Total assets 3 Calculate the operating cash flows. Year Year Operating cash flow Capital Spending Ending net fixed assets Beginning net fixed assets + Depreciation Net capital spending Change in Net Working Capital Ending NWC -Beginning NWC Change in NWC 4 Calculate the cash flow from Assets. Cash Flow from Assets Operating cash flow Net capital spending -Change in NWC Cash flow from assets 5 Calculate the cash flow to creditors. Cash Flow to Creditors Interest paid -Net New Borrowing Cash flow to Creditors 6 Calculate the cash flow to stockholders. Cash Flow to Stockholders Dividends paid -Net new equity raised Cash flow to Stockholders Question #1 Question #2