Question
Net sales 5,100,000 4,800,000 Cost of sales 2,670,000 2,520,000 Gross profit 2,430,000 2,280,000 Operating expenses Management salaries 920,000 860,000 Rent 175,000 170,000 Depreciation 120,000 103,000
Net sales 5,100,000 4,800,000\ Cost of sales 2,670,000 2,520,000\ Gross profit 2,430,000 2,280,000\ Operating expenses\ Management salaries 920,000 860,000\ Rent 175,000 170,000\ Depreciation 120,000 103,000\ Wages and benefits 360,000 348,000\ Telephone 9,600 8,200\ Repairs and maintenance 38,600 41,700\ Miscellaneous 15,600 15,900\ Total operating expenses 1,638,800 1,546,800\ Earnings before interest and taxes 791,200 733,200\ Interest expense 265,000 233,000\ Earnings before taxes 526,200 500,200\ Income taxes 131,550 125,050\ Net income 394,650 375,150\ Rankweil Industries\ Income Statement\ For the year ending December 31 2021 2020\ Current assets\ Cash and cash equivalents 69,000 62,700\ Short-term marketable securities 286,000 314,000\ Accounts receivable 87,000 79,500\ Inventory 738,000 656,000\ Prepaid expenses 32,800 27,700\ Total current assets 1,212,800 1,139,900\ Fixed assets\ Land 650,000 650,000\ Buildings 3,100,000 3,100,000\ Plant & equipment 2,685,000 2,374,000\ Sub-total 6,435,000 6,124,000\ Less: accumulated depreciation (1,002,000) (920,000)\ Total fixed assets 5,433,000 5,204,000\ Total assets 6,645,800 6,343,900\ Current liabilities\ Accounts payable 610,000 580,000\ Operating line of credit 129,000 115,000\ Current portion of long-term debt 10,000 10,000\ Total current liabilities 749,000 705,000\ Long-term liabilities\ Bond payable 2,910,000 2,945,000\ Shareholders equity\ Preferred shares 50,000 50,000\ Common shares 250,000 220,000\ Retained earnings 2,686,800 2,423,900\ Total shareholders equity 2,986,800 2,693,900\ Total liabilities and shareholders equity 6,645,800 6,343,900\ Rankweil Industries\ Balance Sheet\ As at December 31\ Financial Statement Analysis Page 2\ Other information\ 15% of Rankweil Industries sales are on credit at terms net 30. All inventory purchases\ are on credit at terms net 60.\ The market value of Rankweil Industries common share is $19.80 and it has 140,000\ common shares and 60,000 preferred shares outstanding. The preferred shares pay a\ $0.10 annual dividend. The tax rate is 25.0%.\ Required:\ 1. Prepare an indirect cash flow statement for DEF Company.
Net sales 5,100,000 4,800,000\ Cost of sales 2,670,000 2,520,000\ Gross profit 2,430,000 2,280,000\ Operating expenses\ Management salaries 920,000 860,000\ Rent 175,000 170,000\ Depreciation 120,000 103,000\ Wages and benefits 360,000 348,000\ Telephone 9,600 8,200\ Repairs and maintenance 38,600 41,700\ Miscellaneous 15,600 15,900\ Total operating expenses 1,638,800 1,546,800\ Earnings before interest and taxes 791,200 733,200\ Interest expense 265,000 233,000\ Earnings before taxes 526,200 500,200\ Income taxes 131,550 125,050\ Net income 394,650 375,150\ Rankweil Industries\ Income Statement\ For the year ending December 31 2021 2020\ Current assets\ Cash and cash equivalents 69,000 62,700\ Short-term marketable securities 286,000 314,000\ Accounts receivable 87,000 79,500\ Inventory 738,000 656,000\ Prepaid expenses 32,800 27,700\ Total current assets 1,212,800 1,139,900\ Fixed assets\ Land 650,000 650,000\ Buildings 3,100,000 3,100,000\ Plant & equipment 2,685,000 2,374,000\ Sub-total 6,435,000 6,124,000\ Less: accumulated depreciation (1,002,000) (920,000)\ Total fixed assets 5,433,000 5,204,000\ Total assets 6,645,800 6,343,900\ Current liabilities\ Accounts payable 610,000 580,000\ Operating line of credit 129,000 115,000\ Current portion of long-term debt 10,000 10,000\ Total current liabilities 749,000 705,000\ Long-term liabilities\ Bond payable 2,910,000 2,945,000\ Shareholders equity\ Preferred shares 50,000 50,000\ Common shares 250,000 220,000\ Retained earnings 2,686,800 2,423,900\ Total shareholders equity 2,986,800 2,693,900\ Total liabilities and shareholders equity 6,645,800 6,343,900\ Rankweil Industries\ Balance Sheet\ As at December 31\ Financial Statement Analysis Page 2\ Other information\ 15% of Rankweil Industries sales are on credit at terms net 30. All inventory purchases\ are on credit at terms net 60.\ The market value of Rankweil Industries common share is $19.80 and it has 140,000\ common shares and 60,000 preferred shares outstanding. The preferred shares pay a\ $0.10 annual dividend. The tax rate is 25.0%.\ Required:\ 1. Prepare an indirect cash flow statement for DEF Company.
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Finance For Nonfinancial Managers Beginners Handbook For Finance
Authors: Murugesan Ramaswamy
1st Edition
1516973801, 978-1516973804
