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Using Module 1 Exam A file: What is the value of AT operating income 2 1 Question 1 0 Answer a . - 3 8

Using Module 1 Exam A file: What is the value of AT operating income21
Question 10Answer
a.-38,512
b.38,512
c.-28,614
d.28,614
EXHIBITS: INPUT DATA (for D'Leon)
Balance Sheets
20212020
Assets
Casha $7,282 $57,600
Accounts receivable 632,160351,200
Inventories 1,287,360715,200
Total current assets $1,926,802 $1,124,000
Net fixed assets $939,790 $344,800
Total assets $2,866,592 $1,468,800
Liabilities and equity
Accounts payable $524,160 $145,600
Accruals 489,600136,000
Notes payable 636,808200,000
Total current liabilities $1,650,568 $481,600
Long-term debt 723,432323,432
Total liabilities $2,374,000 $805,032
Common stock (100,000 shares)460,000460,000
Retained earnings 32,592203,768
Total common equity $492,592 $663,768
Total liabilities and equity $2,866,592 $1,468,800
a Assume that all cash is excess cash; i.e., this cash is not needed for operating purposes.
Income Statements 20212020
Sales $6,126,796 $3,432,000
Cost of goods sold 5,528,0002,864,000
Other expenses 519,988358,672
Total operating exp. excl. depreciation and amortization $6,047,988 $3,222,672
Depreciation and amortization 116,96018,900
Earnings before interest and taxes (EBIT) $(38,152) $190,428
Interest expense 122,02443,828
Earnings before taxes (EBT) $(160,176) $146,600
Taxes (25%)-36,650
Net income $(160,176) $109,950
EPS $(1.602) $1.100
DPS $0.110 $0.275
Book value per share $4.926 $6.638
Stock price $2.25 $8.50
Shares outstanding 100,000100,000
Tax rate 25.00%25.00%
Lease payments $40,000 $40,000
Sinking fund payments 00
Statement of Stockholders' Equity, 2021
Common Stock Total
Retained Stockholders'
Shares Amount Earnings Equity
Balances, Dec. 31,2020100,000 $460,000 $203,768 $663,768
Add: Net Income, 2021(160,176)
Less: Dividends to common stockholders (11,000)
Addition (Subtraction) to Retained Earnings (171,176)
Balances, Dec. 31,2021100,000 $460,000 $32,592 $492,592
Statement of Cash Flows, 2021
Operating Activities
Net Income $(160,176)
Depreciation and amortization 116,960
Increase in accounts payable 378,560
Increase in accruals 353,600
Increase in accounts receivable (280,960)
Increase in inventories (572,160)
Net cash provided by operating activities $(164,176)
Investing Activities
Additions to property, plant, and equipment $(711,950)
Net cash used in investing activities $(711,950)
Financing Activities
Increase in notes payable $436,808
Increase in long-term debt 400,000
Payment of cash dividends (11,000)
Net cash provided by financing activities $825,808
Summary
Net decrease in cash $(50,318)
Cash at beginning of the year 57,600
Cash at end of the year $7,282

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