Question
Company J shows the following information on its 2020 income statement: Statement of Comprehensive Income Sales $200,000 Costs $110,000 Depreciation $9,000 Interest $14,000 The companys
Company J shows the following information on its 2020 income statement: Statement of Comprehensive Income
Sales $200,000
Costs $110,000
Depreciation $9,000
Interest $14,000
The companys tax rate is 40%. If net working capital decreased by $20,000 during the year, calculate firms cash flow from operating activities.
In addition, you are told that the companys cash flow to bondholders and cash flow to shareholders were $9,000 and $4,200, respectively. During 2020, the net capital spending was $40,000. What was the increase or decrease in cash during 2020? Hint: You have two formulas for cash flow from asset (CFFA).
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