Question
In order to answer the questions, you need to create (1) an income statement and (2) balance sheet using the information below for Klein Manufacturing.
In order to answer the questions, you need to create (1) an income statement and (2) balance sheet using the information below for Klein Manufacturing. (You should probably use Excel to build the sheets.) The relevant information: Cash $500 Accounts Receivable 20% of Sales Accounts Payable 20% of Cost of Goods Sold Notes Payable $800 Inventory $2,900 Gross Plant & Equipment $22,000 Long-term Debt $4,000 Common Stock $10,000 Sales $7,500 Cost of Goods Sold 40% of Sales Depreciation Expense $1,200 Other Operating Expenses $1,000 Interest Expense 8% of Long-term Debt Income Taxes 25% of Taxable Income Accumulated depreciation at 2017 $6,000 Since I didnt give you retained earnings, you will need to calculate it. Retained earnings are the amount necessary to balance your balance sheet. Since total liabilities added to total equity must equal total assets, start with total assets, then subtract the liabilities and equity you know.
a. What is the firms operating cash flow for 2018? [4 pts.]
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