Calculate Operating Income and Net Income

The following information is available from the accounting records of Monofill Inc. for the year ended December 31, 2016:

Net cash provided by financing activities

$127,000

Dividends paid

28,000

Extraordinary loss from flood, net of tax savings of $35,000

135,000

Income tax expense

16,000

Depreciation

31,000

Interest Expense

12,500

Net sales

864,000

Advertising expense

25,000

Accounts receivable

77,000

Cost of goods sold

559,000

General and administrative expenses

183,000

a.Using the above appropriate entries, calculate the operating income for the company [also called ?Income from operations?].

Net sales

$864,000

Cost of goods sold

(559,000)

? you get the picture: fill in appropriate entries & numbers

305,000

?

?

?

Operating Income =

b.Calculate the company?s net income for the year.

[this is a continuation of part (a)]

Operating income [from (a)]

Interest expense

don?t forget to pay taxes, which the textbook forgot ?

?

?

?

Net income (loss)

Operating income versus net income

If you were interested in evaluating the profitability of a company and could have only limited historical data, which you prefer to know the company?s operating income or net income for the past 5 years?Explain your answer.No calculations; just explain/comment on your response here ?

Cash flows from operating, investing and financing activities ? direct method

The following information is available from Moonvessel Co.?s accounting records of the year ended December 31, 2016 (amounts in millions):

Cash dividends declared and paid

$340

Interest and taxes paid

110

Collections from customers

1,530

e.g. Operating

Net Income

120

Repayment of long-term debt

320

Purchase of land and buildings

70

Cash paid to suppliers and employees

1,230

Depreciation

70

Issuance of common stock

400

Purchase of new delivery trucks

80

[Using data from above, fill in your Statement of Cash Flow-like numbers using the tables below:]

[you might want to use above table?s column 3 to classify which of the 3 categories (Operating; Investing; Finance) each is ?]

[? and make sure you observe cash flow sign convention: (+) for cash provided; (-) for cash used. Also some of the above cash flows have two items lumped together, e.g. ?interest and taxes paid?. In practice, they should be separated but here, we work with what is given ?]

a) Calculate Net cash provided (used) by operating activities

(in millions)

Cash received from customers

$1,530

? fill in the rest

Net cash provided (used) by operating activities

b) Calculate Net cash provided (used) by investing activities

(in millions)

? fill in the rest

Net cash provided (used) investing activities

c) Calculate Net cash provided by financing activities

(in millions)

? fill in the rest

Net cash provided (used) in financing activities

d) Calculate Net cash increase (decrease) in cash for the year

(in millions)

Net cash increase = (a) + (b) + (c)

Calculate Operating Income and Net Income The following information is available from the accounting records of Monofill Inc. for the year ended December 31, 2016: Net cash provided by financing activities Dividends paid Extraordinary loss from flood, net of tax savings of $35,000 Income tax expense Depreciation Interest Expense Net sales Advertising expense Accounts receivable Cost of goods sold General and administrative expenses $127,000 28,000 135,000 16,000 31,000 12,500 864,000 25,000 77,000 559,000 183,000 a. Using the above appropriate entries, calculate the operating income for the company [also called \"Income from operations\"]. b. Net sales Cost of goods sold ... you get the picture: fill in appropriate entries & numbers ... ... ... Operating Income = Calculate the company's net income for the year. $864,000 (559,000) 305,000 [this is a continuation of part (a)] Operating income [from (a)] Interest expense don't forget to pay taxes, which the textbook forgot ... ... ... ... Net income (loss) Operating income versus net income If you were interested in evaluating the profitability of a company and could have only limited historical data, which you prefer to know the company's operating income or net income for the past 5 years? Explain your answer. No calculations; just explain/comment on your response here ... AD-632OL: Financial Concepts -12016 Spring2 Wk2 Ex4 Cash flows from operating, investing and financing activities - direct method The following information is available from Moonvessel Co.'s accounting records of the year ended December 31, 2016 (amounts in millions): Cash dividends declared and paid Interest and taxes paid Collections from customers Net Income Repayment of long-term debt Purchase of land and buildings Cash paid to suppliers and employees Depreciation Issuance of common stock Purchase of new delivery trucks $340 110 1,530 120 320 70 1,230 70 400 80 e.g. Operating [Using data from above, fill in your Statement of Cash Flow-like numbers using the tables below:] [you might want to use above table's column 3 to classify which of the 3 categories (Operating; Investing; Finance) each is ...] [... and make sure you observe cash flow sign convention: (+) for cash provided; (-) for cash used. Also some of the above cash flows have two items lumped together, e.g. \"interest and taxes paid\". In practice, they should be separated but here, we work with what is given ... ] a) Calculate Net cash provided (used) by operating activities Cash received from customers ... fill in the rest (in millions) $1,530 Net cash provided (used) by operating activities b) Calculate Net cash provided (used) by investing activities ... fill in the rest (in millions) Net cash provided (used) investing activities c) Calculate Net cash provided by financing activities ... fill in the rest (in millions) Net cash provided (used) in financing activities d) Calculate Net cash increase (decrease) in cash for the year Net cash increase = (a) + (b) + (c) AD-632OL: Financial Concepts -22016 Spring2 (in millions) Wk2 Ex4