Statement of Cash Flow (15 Points) 23 For the year ended Dec 31, 2016, Omni Company reported net income of $118,000, depreciation expense increased of $15,000, and recognized $10,000 loss on disposal of equipment (filling amount is 2points each, filing account is 1 point each) In addition, current operating assets and liabilities from the companys comparative balance sheet were as follows Dec 31, 2016 Dec 31, 2015 Accounts Receivable $6,500 $4,900 Inventory $12,300 $15,000 Accounts Payable $4,800 $5,200 Based upon above information, please generate cash flows from operation activities in 2016 Cash flows from operating activities Net Income $118,000 Adjustments to reconcile net income to net cash flow from operating activities Depreciation $ Loss on Disposal of Equipment $ Changes in current operating assets and liabilities $ $ $ Net Cash Flow from Operating Activities $ Calculations (20 Points) Elfman 24 Elman Co is considering the following alternative plans for financing their company Plan I Plan II Issue 10 Bonds (at face) $3,000,000 Issue $10 (par value) Common Stock $4,000,000 $1,000,000 Income tax is estimated at 40 of income Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $1,000,000 Plan I Plan II Earnings before bond interest and income tax $1,000,000 $1,000,000 Deduct interest on bonds Income before income tax Deduct Income Tax Net Income after Income Tax Less Dividends on Preferred Stock 0 0 Available for Dividends on Common Stock Divided by Shares of Common Stock Outstanding Earnings Per Share on Common Stock $ $

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Statement of Cash Flow (15 Points) 23. For the year ended Dec 31, 2016, Omni Company reported net income of $118,000, depreciation expense increased of

Statement of Cash Flow (15 Points)

23. For the year ended Dec 31, 2016, Omni Company reported net income of $118,000, depreciation expense increased of $15,000, and recognized $10,000 loss on disposal of equipment. (filling amount is 2points each, filing account is 1 point each)

In addition, current operating assets and liabilities from the companys comparative balance sheet were as follows:

___________________________________Dec 31, 2016 Dec 31, 2015

Accounts Receivable $6,500 $4,900

Inventory $12,300 $15,000

Accounts Payable $4,800 $5,200

Based upon above information, please generate cash flows from operation activities in 2016.

Cash flows from operating activities:
Net Income	$118,000
Adjustments to reconcile net income to net cash flow from operating activities
Depreciation	$________
Loss on Disposal of Equipment	$_________
Changes in current operating assets and liabilities
?_________________________	$__________
?_________________________	$__________
? _________________________	$__________

Net Cash Flow from Operating Activities $______________

Calculations (20 Points)

Elfman 24. Elman Co. is considering the following alternative plans for financing their company:

	Plan I	Plan II
Issue 10% Bonds (at face)	-	$3,000,000
Issue $10 (par value) Common Stock	$4,000,000	$1,000,000

Income tax is estimated at 40% of income.

Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $1,000,000.

	Plan I	Plan II
Earnings before bond interest and income tax	$1,000,000	$1,000,000
Deduct: interest on bonds	______________	_____________
Income before income tax	_______________	_____________
Deduct: Income Tax	_______________	______________
Net Income after Income Tax	_______________	_______________
Less: Dividends on Preferred Stock	0	0
Available for Dividends on Common Stock	_______________	______________