QUESTIONS AND PROBLEMS Building a Balance Sheet [LO1] Penguin Pucks, Inc., has current assets of $4,800, net fixed assets of $27,500, current liabilities of $4,200, and long-term debt of $10,500. What is the value of the shareholders' equity account for this firm? How much is net working capital? Building an Income Statement [LO1] Billy's Exterminators, Inc., has sales of $734,000, costs of $315,000, depreciation expense of $48,000, interest expense of $35,000, and a tax rate of 35 percent. What is the net income for this firm? Dividends and Retained Earnings [LO1] Suppose the firm in Problem 2 paid out $85,000 in cash dividends. What is the addition to retained earnings? Per-Share Earnings and Dividends [LO1] Suppose the firm in Problem 3 had 110,000 shares of common stock outstanding. What is the earnings per share, or EPS, figure? What is the dividends per share figure? Market Values and Book Values [LO1] Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $6 million. The machinery can be sold to the Romulans today for $5.3 million. Klingon's current balance sheet shows net fixed assets of $3.2 million, current liabilities of $900,000, and net working capital of $215,000. If all the current assets were liquidated today, the company would receive $1.25 million cash. What is the book value of Klingon's total assets today? What is the market value? Calculating Taxes [LO3] The Anberlin Co. had $255,000 in 2011 taxable income. Using the rates from Table 2.3 in the chapter, calculate the company's 2011 income taxes Tax Rates [LO3] In Problem 6, what is the average tax rate? What is the marginal tax rate? Calculating OCF [LO4] Chevelle, Inc., has sales of $39,500, costs of $18,400, depreciation expense of $1,900, and interest expense of $1,400. If the tax rate is 35 percent, what is the operating cash flow, or OCF? Calculating Net Capital Spending [LO4] Earnhardt Driving School's 2010 balance sheet showed net fixed assets of $2.8 million, and the 2011 balance sheet showed net 1. BASIC (Questions 1-13) 2. X 3. X 4. X 5. 6. X 7. 8. X 9
