Question
The following is the balance sheet for Crown-well Inc. for the period ending December 2011: Crown-well Inc. Balance Sheet (2011) Cash $ 24,000 Current Liabilities
The following is the balance sheet for Crown-well Inc. for the period ending December 2011:
Crown-well Inc.
Balance Sheet (2011)
Cash
$ 24,000
Current Liabilities
$ 30,000
Other current assets
51,000
Long-Term Notes payable
33,000
Total current assets
75,000
Bonds
40,000
Investments
40,000
Common Stock
150,000
Fixed Assets(Net)
125,000
Retained Earnings
49,000
Land
62,000
$ 302,000
$ 302,000
The following transactions occurred during 2012:
i. $20,000, sale on some of its investments
ii. $12,000, additional land for expansion
iii. $10,000, bonds payment
iv. $20,000, issuance of common stock
v. $5,000, dividend payment to stockholders
vi. $42,000, Net Income for 2012
vii. $18,000, depreciation
viii. $10,050, taxes
ix. $10,000, Interest expense
x. $18,000, purchase of second piece of land, using $12,000 in bonds and $6,000 in long-term notes payable.
Required:
a) Prepare a balance Sheet for Crown-well Inc. as at period ending 2012. (5 POINTS)
b) Compute the firms free cash flows for 2012. (Hint: In computing FCF, please consider changes in investments and changes in Land as separate items from the Net Fixed Asset in the balance sheet)
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