Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
2-81
79. You are evaluating the balance sheet for Goodman's Bees Corporation. From the balance
sheet you find the following balances: cash and marketable securities = $200,000, accounts
receivable = $1,100,000, inventory = $2,000,000, accrued wages and taxes = $500,000, accounts
payable = $600,000, and notes payable = $100,000. Calculate Goodman's Bees' net working
capital.
80. Zoeckler Mowing & Landscaping's year-end 2011 balance sheet lists current assets of
$350,000, fixed assets of $325,000, current liabilities of $145,000, and long-term debt of
$185,000. Calculate Zoeckler's total stockholders' equity.
81. Reed's Birdie Shot, Inc.'s 2013 income statement lists the following income and
expenses: EBIT = $550,000, interest expense = $43,000, and net income = $300,000. Calculate
the 2013 taxes reported on the income statement.
82. Reed's Birdie Shot, Inc.'s 2013 income statement lists the following income and
expenses: EBIT = $555,000, interest expense = $178,000, and taxes = $148,000. Reed's has no
preferred stock outstanding and 100,000 shares of common stock outstanding. Calculate the
2013 earnings per share.
83. Oakdale Fashions Inc. had $255,000 in 2013 taxable income. If the firm paid $82,100 in
taxes, what is the firm's average tax rate?
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).
Calculate the 2013 net cash flow from operating activities for Ramakrishnan, Inc.
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:
