For the year ended Dec 31, 2016, Omni Company reported net income of $118,000, depreciation expense increased of $15,000, and recognized $10,000 loss on disposal of equipment In addition, current operating assets and liabilities from the companys comparative balance sheet were as follows Dec 31, 2016 Dec 31, 2015 Accounts Receivable $6 500 $4,900 Inventory $12,300 $15,000 Accounts Payable $4,800 $5 200 Based upon above information, please generate cash flows from operation activities in 2016 Cash flows from operating activities Net Income $118,000 Adjustments to reconcile net income to net cash flow from operating activities Depreciation $ Loss on Disposal of Equipment $ Changes in current operating assets and liabilities $ $ $ Net Cash Flow from Operating Activities $ Calculations Elfman 24 Elman Co is considering the following alternative plans for financing their company Plan I Plan II Issue 10 Bonds (at face) $3,000,000 Issue $10 (par value) Common Stock $4,000,000 $1,000,000 Income tax is estimated at 40 of income Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $1,000,000

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 27, 2024

For the year ended Dec 31, 2016, Omni Company reported net income of $118,000, depreciation expense increased of $15,000, and recognized $10,000 loss on disposal

For the year ended Dec 31, 2016, Omni Company reported net income of $118,000, depreciation expense increased of $15,000, and recognized $10,000 loss on disposal of equipment.

In addition, current operating assets and liabilities from the companys comparative balance sheet were as follows:

___________________________________Dec 31, 2016 Dec 31, 2015

Accounts Receivable $6.500 $4,900

Inventory $12,300 $15,000

Accounts Payable $4,800 $5.200

Based upon above information, please generate cash flows from operation activities in 2016.

Cash flows from operating activities:
Net Income	$118,000
Adjustments to reconcile net income to net cash flow from operating activities
Depreciation	$________
Loss on Disposal of Equipment	$_________
Changes in current operating assets and liabilities
?_________________________	$__________
?_________________________	$__________
? _________________________	$__________

Net Cash Flow from Operating Activities $______________

Calculations

Elfman 24. Elman Co. is considering the following alternative plans for financing their company:

	Plan I	Plan II
Issue 10% Bonds (at face)	-	$3,000,000
Issue $10 (par value) Common Stock	$4,000,000	$1,000,000

Income tax is estimated at 40% of income.

Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $1,000,000.