PART Overview of Corporate Finance fixed assets of $3.6 million. The company's 2011 income statement showed a depre- ciation expense of $345,000. What was net capital spending for 2011? Calculating Additions to NWC [L04] The 2010 balance sheet of Greystone, Inc., showed current assets of $3,120 and current liabilities of $1,570. The 2011 balance sheet showed current assets of $3,460 and current liabilities of $1,980. What was the company's 2011 change in net working capital, or NWC? Cash Flow to Creditors [LO4] The 2010 balance sheet of Maria's Tennis Shop, Inc., showed long-term debt of $2.3 million, and the 2011 balance sheet showed long-term debt of $2.55 million. The 2011 income statement showed an interest expense of $190,000. What was the firm's cash flow to creditors during 2011? Cash Flow to Stockholders [LO4] The 2010 balance sheet of Maria's Tennis Shop, Inc., showed $680,000 in the common stock account and $4.3 million in the addi tional paid-in surplus account. The 2011 balance sheet showed $715,000 and $4.7 million in the same two accounts, respectively. If the company paid out $540,000 in cash dividends during 2011, what was the cash flow to stockholders for the year? Calculating Total Cash Flows [LO4] Given the information for Maria's Tennis Shop, Inc., in Problems 11 and 12, suppose you also know that the firm's net capital spending for 2011 was $1,300,000 and that the firm reduced its net working capital investment by $55,000. What was the firm's 2011 operating cash flow, or OCF? Calculating Total Cash Flows [LO4] Jetson Spacecraft Corp. shows the following information on its 2011 income statement: sales $235,000; costs-$141,000; other expenses-$7,900; depreciation expense- $17,300; interest expense - $12,900; taxes $19,565; dividends- $12,300. In addition, you're told that the firm issued $6,100 in new equity during 2011 and redeemed $4,500 in outstanding long-term debt. a. What is the 2011 operating cash flow? b. What is the 2011 cash flow to creditors? c. What is the 2011 cash flow to stockholders? d. If net fixed assets increased by $25,000 during the year, what was the addition 10. 11. 12. 13. IATE 4-22) 14. to NWC? Using Income Statements [L01] Given the following information for Calvani Pizza Co., calculate the depreciation expense: sales $52,000; costs $27,300; addition to retained earnings $5,300; dividends paid- $1,800; interest expense % 15. $4,900; tax rate 35 percent. Preparing a Balance Sheet [LO1] Prepare a 2011 balance sheet for Cornell Corp. based on the following information: cash $127,000; patents and copyrights- $630,000; accounts payable $210,000; accounts receivable - $105,000; tangible net fixed assets $1,620,000; inventory $293,000; notes payable-$160,000; accumulated retained earnings$1,278,000; long-term debt- $845,000. Residual Claims [LO1] Dimeback, Inc., is obligated to pay its creditors $5,800 during the year a. What is the market value of the shareholders' equity if assets have a market 16. 17. value of $7,100? b. What if assets equal $5,200? Marginal versus Average Tax Rates [LO3] (Refer to Table 2.3.) Corporation Growth has $76,000 in taxable income, and Corporation Income has $7,600,000 in taxable income. a. What is the tax bill for each firm? 18
