Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Operations of a company 2020: Revenue (sales) 165,400, cost of goods sold 98,500, other operating expenses 11,250, depreciation 20,800, interest expenses 12,950 and income tax

Operations of a company 2020:

Revenue (sales) 165,400, cost of goods sold 98,500, other operating expenses 11,250, depreciation 20,800, interest expenses 12,950 and income tax rate is 20%.

Dividends paid to shareholders amount to 50% operating profit after income tax.

The company has sold new shares to shareholders during the year in the amount of 15,000 and repaid outstanding long-term loans of 7,600.

The company collected all sales and paid operating expenses and income tax during the year.

Based on this information, answer the following:

a) Set up an income statement that shows the company's performance in 2020. What cash flow comes from the operation (OCF)?

b) What was the effect of this information on the company's equity?

c) What was the cash flow to/from creditors and otherwise shareholders in the year 2020?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

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

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

Students also viewed these Accounting questions