Begin with the partial model in the file Ch06 P20 Build a Model.xlsx.

The partial balance sheets of Britton String are shown here.

Britton String Corp.: Partial Balance Sheets as of December 31
(Millions of Dollars)
	2022			2021
Assets
Cash and cash equivalents	$	85		$	58
Short-term investments		50			48
Accounts receivable		100			130
Inventories		258			190
Total current assets	$	493		$	426
Net fixed assets		300			266
Total assets	$	793		$	692
Liabilities and Equity
Accounts payable	$	73		$	64
Accruals		42			56
Notes payable		38			42
Total current liabilities	$	153		$	162
Long-term debt		208			176
Total liabilities	$	361		$	338
Common stock		?			226
Retained earnings		?			128
Total common equity		?		$	354
Total liabilities and equity		?		$	692

The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number. Use a minus sign to enter negative values, if any.

Download spreadsheet Ch06 P20 Build a Model-91232b.xlsx

1. Britton String Corp. manufactures specialty strings for musical instruments and tennis racquets. Its most recent sales were $860 million; operating costs (excluding depreciation) were equal to 85% of sales; net fixed assets were $300 million; depreciation amounted to 9% of net fixed assets; interest expenses were $22 million; the state-plus-federal corporate tax rate was 25%; and it paid 30% of its net income out in dividends. Given this information, construct its income statement. Also calculate total dividends and the addition to retained earnings.

   Britton String Corp.: Income Statement for Year Ending
   December 31, 2022 (Millions of Dollars)
   	2022
   Sales	$ fill in the blank 2
   Operating costs excluding depreciation	fill in the blank 3
   EBITDA	$ fill in the blank 4
   Depreciation	fill in the blank 5
   EBIT	$ fill in the blank 6
   Interest expense	fill in the blank 7
   EBT	$ fill in the blank 8
   Taxes (25%)	fill in the blank 9
   Net income	$ fill in the blank 10
   Common dividends	$ fill in the blank 11
   Addition to retained earnings	$ fill in the blank 12

2. Britton issued $36 million of new common stock in the most recent year. Using this information and the results from part a, fill in the missing values for common stock, retained earnings, total common equity, and total liabilities and equity.

   Britton String Corp.: Partial Balance Sheet as of December 31
   (Millions of Dollars)
   	2022
   Common stock	$ fill in the blank 13
   Retained earnings	fill in the blank 14
   Total common equity	$ fill in the blank 15
   Total liabilities and equity	$ fill in the blank 16

3. Construct the statement of cash flows for 2022.

   Britton String Corp.: Statement of Cash Flows for 2022
   (Millions of Dollars)
   	2022
   Operating Activities
   Net income	$ fill in the blank 17
   Noncash adjustments
   Depreciation	fill in the blank 18
   Working capital adjustments
   Due to change in accounts receivable	fill in the blank 19
   Due to change in inventories	fill in the blank 20
   Due to change in accounts payable	fill in the blank 21
   Due to change in accruals	fill in the blank 22
   Net cash provided (used) by operating activities	$ fill in the blank 23
   Investing Activities
   Cash used to acquire fixed assets	$ fill in the blank 24
   Due to change in short-term investments	fill in the blank 25
   Net cash provided (used) by investing activities	$ fill in the blank 26
   Financing Activities
   Due to change in notes payable	$ fill in the blank 27
   Due to change in long-term debt	fill in the blank 28
   Due to change in common stock	fill in the blank 29
   Payment of common dividends	fill in the blank 30
   Net cash provided (used) by financing activities	$ fill in the blank 31
   Summary
   Net increase/decrease in cash	$ fill in the blank 32
   Cash at the beginning of the year	fill in the blank 33
   Cash at the end of the year	$ fill in the blank 34