31.
Statement of Cash Flows Paige’s Properties Inc. reported 2013 net income of $5 million
and depreciation of $1,500,000. The top part Paige’s Properties, Inc.’s 2012 and 2013
balance sheets is listed as follows (in millions of dollars).
What is the 2013 net cash flow from operating activities for Paige’s Properties, Inc.?
A.
-$13,500,000
32.
Statement of Cash Flows In 2013, Upper Crust had cash flows from investing activities of
($250,000) and cash flows from financing activities of ($150,000). The balance in the
firm’s cash account was $90,000 at the beginning of 2013 and $105,000 at the end of the
year. What was Upper Crust’s cash flow from operations for 2013?
A.
$15,000
$105,000
$400,000
$415,000
33.
Statement of Cash Flows In 2013, Lower Case Productions had cash flows from investing
activities of +$50,000 and cash flows from financing activities of +$100,000. The balance
in the firm’s cash account was $80,000 at the beginning of 2013 and $65,000 at the end of
the year. What was Lower Case’s cash flow from operations for 2013?
34.
Free Cash Flow You are considering an investment in Crew Cut, Inc. and want to evaluate
the firm’s free cash flow. From the income statement, you see that Crew Cut earned an
EBIT of $23 million, paid taxes of $4 million, and its depreciation expense was $8 million.
Crew Cut’s gross fixed assets increased by $10 million from 2007 to 2008. The firm’s
current assets increased by $6 million and spontaneous current liabilities increased by $4
million. What is Crew Cut’s operating cash flow, investment in operating capital and free
cash flow for 2013, respectively in millions?
35.
Free Cash Flow You are considering an investment in Cruise, Inc. and want to evaluate
the firm’s free cash flow. From the income statement, you see that Cruise earned an EBIT
of $202 million, paid taxes of $51 million, and its depreciation expense was $75 million.
Cruise’s gross fixed assets increased by $70 million from 2012 to 2013. The firm’s current
assets decreased by $10 million and spontaneous current liabilities increased by $6
million. What is Cruise’s operating cash flow, investment in operating capital, and free
cash flow for 2013, respectively, in millions?
A.
$202, $70, $130
$226, $70, $156
$226, $54, $172
36.
Free Cash Flow Catering Corp. reported free cash flows for 2013 of $8 million and
investment in operating capital of $2 million. Catering listed $1 million in depreciation
expense and $2 million in taxes on its 2008 income statement. What was Catering‘s 2013
EBIT?
37.
Statement of Retained Earnings TriCycle, Corp. began the year 2013 with $25 million in
retained earnings. The firm earned net income of $7 million in 2008 and paid $1 million to
its preferred stockholders and $3 million to its common stockholders. What is the year-end
2013 balance in retained earnings for TriCycle?
38.
Statement of Retained Earnings Night Scapes, Corp. began the year 2013 with $10
million in retained earnings. The firm suffered a net loss of $2 million in 2013 and yet paid
$2 million to its preferred stockholders and $1 million to its common stockholders. What is
the year-end 2013 balance in retained earnings for Night Scapes?
39.
Statement of Retained Earnings Use the following information to find dividends paid to
common stockholders during 2013.
40.
Balance Sheet Harvey’s Hamburger Stand has total assets of $3 million of which $1
million are current assets. Cash makes up 20 percent of the current assets and accounts
receivable makes up another 5 percent of current assets. Harvey’s gross plant and
equipment has a book value of $1.5 million and other long-term assets have a book value
of $1 million. Using this information, what is the balance of inventory and the balance of
depreciation on Harvey’s Hamburger Stand’s balance sheet?
A.
$250,000, $500,000
$250,000, $1 million
$750,000, $500,000
41.
Balance Sheet School Books, Inc. has total assets of $18 million of which $6 million are
current assets. Cash makes up 10 percent of the current assets and accounts receivable
makes up another 40 percent of current assets. School Books’ gross plant and equipment
has an original cost of $13 million and other long-term assets have a cost value of $2
million. Using this information, what are the balance of inventory and the balance of
depreciation on School Books’ balance sheet?
42.
Balance Sheet Ted’s Taco Shop has total assets of $5 million. Forty percent of these
assets are financed with debt of which $400,000 is current liabilities. The firm has no
preferred stock but the balance in common stock and paid-in surplus is $1 million. Using
this information what is the balance for long-term debt and retained earnings on Ted’s
Taco Shop’s balance sheet?
43.
Balance Sheet Hair Etc. has total assets of $15 million. Twenty percent of these assets
are financed with debt of which $1 million is current liabilities. The firm has no preferred
stock but the balance in common stock and paid-in surplus is $8 million. Using this
information what is the balance for long-term debt and retained earnings on Hair Etc.’s
balance sheet?
44.
Market Value versus Book Value Acme Bricks balance sheet lists net fixed assets as $40
million. The fixed assets could currently be sold for $50 million. Acme’s current balance
sheet shows current liabilities of $15 million and net working capital of $12 million. If all
the current accounts were liquidated today, the company would receive $77 million cash
after paying $15 million in liabilities. What is the book value of Acme’s assets today? What
is the market value of these assets?
45.
Market Value versus Book Value Glo’s Glasses balance sheet lists net fixed assets as
$20 million. The fixed assets could currently be sold for $25 million. Glo’s current balance
sheet shows current liabilities of $7 million and net working capital of $3 million. If all the
current accounts were liquidated today, the company would receive $9 million cash after
paying $7 million in liabilities. What is the book value of Glo’s assets today? What is the
market value of these assets?
46.
Market Value versus Book Value Rupert’s Rims balance sheet lists net fixed assets as
$15 million. The fixed assets could currently be sold for $17 million. Rupert’s current
balance sheet shows current liabilities of $5 million and net working capital of $3 million. If
all the current accounts were liquidated today, the company would receive $6 million cash
after paying $5 million in liabilities. What is the book value of Rupert’s assets today? What
is the market value of these assets?
47.
Debt versus Equity Financing You are considering a stock investment in one of two firms
(AllDebt, Inc. and AllEquity, Inc.), both of which operate in the same industry and have
identical operating income of $600,000. AllDebt, Inc. finances its $1.2 million in assets with
$1 million in debt (on which it pays 10 percent interest annually) and $0.2 million in equity.
AllEquity, Inc. finances its $1.2 million in assets with no debt and $1.2 million in equity.
Both firms pay a tax rate of 30 percent on their taxable income. What are the asset
funders’ (the debt holders and stockholders) resulting return on assets for the two firms?
48.
Debt versus Equity Financing You are considering a stock investment in one of two firms
(AllDebt, Inc. and AllEquity, Inc.), both of which operate in the same industry and have
identical operating income of $3 million. AllDebt, Inc. finances its $6 million in assets with
$5 million in debt (on which it pays 5 percent interest annually) and $1 million in equity.
AllEquity, Inc. finances its $6 million in assets with no debt and $6 million in equity. Both
firms pay a tax rate of 40 percent on their taxable income. What are the asset funders’ (the
debt holders and stockholders) resulting return on assets for the two firms?
49.
Debt versus Equity Financing You are considering a stock investment in one of two firms
(AllDebt, Inc. and AllEquity, Inc.), both of which operate in the same industry and have
identical operating income of $400,000. AllDebt, Inc. finances its $800,000 in assets with
$600,000 in debt (on which it pays 5 percent interest annually) and $200,000 in equity.
AllEquity, Inc. finances its $800,000 in assets with no debt and $800,000 in equity. Both
firms pay a tax rate of 30 percent on their taxable income. What are the asset funders’ (the
debt holders and stockholders) resulting return on assets for the two firms?
50.
Income Statement You have been given the following information for Fina’s Furniture
Corp.:
Net sales = $25,500,000;
Cost of goods sold = $10,250,000;
Addition to retained earnings = $305,000;
Dividends paid to preferred and common stockholders = $500,000;
Interest expense = $2,000,000.
The firm’s tax rate is 30 percent. What is the depreciation expense for Fina’s Furniture
Corp.?