Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following abbreviated financial statements for Cabo Wabo, Inc.: (Enter your answer as directed, but do not round intermediate calculations.) CABO WABO, INC. Partial

Consider the following abbreviated financial statements for Cabo Wabo, Inc.: (Enter your answer as directed, but do not round intermediate calculations.)

CABO WABO, INC. Partial Balance Sheets as of December 31, 2013 and 2014
2013 2014 2013 2014
Assets Liabilities and Owners Equity
Current assets $ 2,697 $ 2,848 Current liabilities $ 1,135 $ 1,679
Net fixed assets 12,411 12,969 Long-term debt 6,687 7,846

CABO WABO, INC. 2014 Income Statement
Sales $ 39,950
Costs 20,026
Depreciation 3,395
Interest paid 636

Requirement 1:

What is owners equity for 2013 and 2014?

Owners equity
2013 $
2014 $

Requirement 2:

What is the change in net working capital for 2014? (Negative amount should be indicated by a minus sign.)

Change in net working capital $

Requirement 3:
In 2014, Cabo Wabo purchased $5,716 in new fixed assets. The tax rate is 40 percent.

(a)

How much in fixed assets did Cabo Wabo sell? (Round your answer to the nearest whole dollar amount (e.g., 32).)

Fixed assets sold $

(b)

What is the cash flow from assets for the year? (Round your answer to the nearest whole dollar amount (e.g., 32).)

Cash flow from assets $

Requirement 4:
During 2014, Cabo Wabo raised $1,750 in new long-term debt.

(a)

What is the cash flow to creditors? (Negative amount should be indicated by a minus sign. (Round your answer to the nearest whole dollar amount (e.g., 32).)

Cash flow to creditors $

(b)

How much long-term debt must Cabo Wabo have paid off during the year? (Round your answer to the nearest whole dollar amount (e.g., 32).)

Debt retired $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

5. Prepare for the role of interviewee

Answered: 1 week ago

Question

6. Secure job interviews and manage them with confidence

Answered: 1 week ago