84.
Hunt Taxidermy, Inc. is concerned about the taxes paid by the company in 2013. In
addition to $36.5 million of taxable income, the firm received $1,250,000 of interest on
state-issued bonds and $400,000 of dividends on common stock it owns in Hunt
Taxidermy, Inc. Calculate Hunt Taxidermy’s taxable income.
85.
Ramakrishnan Inc. reported 2013 net income of $20 million and depreciation of
$1,500,000. The top part of Ramakrishnan, Inc.’s 2012 and 2013 balance sheets is listed as
follows (in millions of dollars).
86.
In 2014, Usher Sports Shop had cash flows from investing activities of ($2,150,000) and
cash flows from financing activities of ($3,219,000). The balance in the firm’s cash account
was $980,000 at the beginning of 2014 and $1,025,000 at the end of the year. Calculate
Usher Sports Shop’s cash flow from operations for 2014.
87.
You are considering an investment in Fields and Struthers, Inc. and want to evaluate the
firm’s free cash flow. From the income statement, you see that Fields and Struthers
earned an EBIT of $52 million, paid taxes of $10 million, and its depreciation expense was
$5 million. Fields and Struthers’ gross fixed assets increased by $38 million from 2012 to
2013. The firm’s current assets increased by $20 million and spontaneous current
liabilities increased by $12 million. Calculate Fields and Struthers’ operating cash flow
(OCF), investment in operating capital (IOC), and free cash flow (FCF) for 2013.
88.
Tater and Pepper Corp. reported free cash flows for 2013 of $20 million and investment in
operating capital of $15 million. Tater and Pepper listed $8 million in depreciation expense
and $12 million in taxes on its 2010 income statement. Calculate Tater and Pepper’s 2013
EBIT.
89.
Mr. Husker’s Tuxedos, Corp. began the year 2013 with $205 million in retained earnings.
The firm earned net income of $30 million in 2013 and paid $5 million to its preferred
stockholders and $12 million to its common stockholders. What is the year-end 2013
balance in retained earnings for Mr. Husker’s Tuxedos?
90.
Brenda’s Bar and Grill has total assets of $17 million of which $5 million are current
assets. Cash makes up 12 percent of the current assets and accounts receivable makes up
another 40 percent of current assets. Brenda’s gross plant and equipment has a cost value
of $12 million and other long-term assets have a cost value of $1,000,000. Using this
information, what are the balance of inventory and the balance of depreciation on
Brenda’s Bar and Grill’s balance sheet?
91.
Ed’s Tobacco Shop has total assets of $100 million. Fifty percent of these assets are
financed with debt of which $37 million is current liabilities. The firm has no preferred
stock but the balance in common stock and paid-in surplus is $32 million. Using this
information what is the balance for long-term debt and retained earnings on Ed’s Tobacco
Shop’s balance sheet?
92.
Muffin’s Masonry, Inc.’s balance sheet lists net fixed assets as $16 million. The fixed
assets could currently be sold for $17 million. Muffin’s current balance sheet shows
current liabilities of $5.5 million and net working capital of $6.5 million. If all the current
accounts were liquidated today, the company would receive $10.25 million cash after
paying $5.5 million in liabilities. What is the book value of Muffin’s Masonry’s assets
today? What is the market value of these assets?
93.
You have been given the following information for Corky’s Bedding Corp.:
Net sales = $15,250,000;
Cost of goods sold = $5,750,000;
Addition to retained earnings = $4,000,000;
Dividends paid to preferred and common stockholders = $995,000;
Interest expense = $1,150,000.
The firm’s tax rate is 30 percent. Calculate the depreciation expense for Corky‘s Bedding
Corp.
94.
Dogs 4 U Corporation has net cash flow from financing activities for the last year of $10
million. The company paid $8 million in dividends last year. During the year, the change in
notes payable on the balance was $9 million, and change in common and preferred stock
was $0 million. The end of year balance for long-term debt was $44 million. Calculate the
beginning of year balance for long-term debt.
95.
The 2011 income statement for Duffy’s Pest Control shows that depreciation expense is
$180 million, EBIT is $420 million, EBT is $240 million, and the tax rate is 30 percent. At
the beginning of the year, the balance of gross fixed assets was $1,500 million and net
operating working capital was $500 million. At the end of the year gross fixed assets was
$1,803 million. Duffy’s free cash flow for the year was $425 million. Calculate the end of
year balance for net operating working capital.
96.
The CEO of Tom and Sue’s wants the company to earn a net income of $3.25 million in
2014. Cost of goods sold is expected to be 60 percent of net sales, depreciation expense is
$2.9 million, interest expense is expected to increase to $1.050 million, and the firm’s tax
rate will be 30 percent. Calculate the net sales needed to produce net income of $3.25
million.
97.
All of the following would be a result of changing to the MACRS method of depreciation
EXCEPT:
98.
Which of the following is NOT a source of cash?
99.
Which of the following is a use of cash?
100.
Is it possible for a firm to have positive net income and yet to have cash flow problems?
101.
All of the following are cash flows from operations EXCEPT: