Life-Positive’s Account Balances 2021 ($) 2022 ($) Accounts Payable 24,600.00 21,250.00 Accounts receivable 15,700.00 12,340.00 Cash 23,450.00 28,600.00 Cost of goods sold 19,700.00 23,000.00 Depreciation 3,090.00 4,590.00 Dividends 5,800.00 10,800.00 Interest 2,340.00 2,890.00 Inventory 7,050.00 8,640.00 Long-term debt 28,000.00 30,000.00 Net fixed assets 41,500.00 48,000.00 Other expenses 2,400.00 2,800.00 Sales 58,000.00 62,500.00 Short-term Notes Payable 2,890.00 2,340.00 Shares outstanding 85,000.00 90,000.00The tax rate is 32%A balance sheet is a type of financial statement that shows the state of a company's finances at a certain moment in time. The balance sheet displays the company's assets, liabilities, and the difference between the two (equity).The fundamental accounting equation, which asserts that: is followed by the balance sheet.Liabilities + Equity Equals AssetsAccording to this formula, a company's total assets must equal its entire liabilities and equity. The assets of the business are listed on the left side of the balance sheet, and its liabilities and equity are listed on the right side.1)Life Positive's AccountBalance SheetAssets2021 ($)2022 ($)Cash2345028600Accounts Receivable1570012340Inventory70508640Net Fixed Assets4150048000Total Assets8770097580Liabilities and Owner's Equity Accounts Payable2460021250Short term Notes Payable28902340Long term Debt2800030000Common Stock1729020000Retained Earnings (20720-5800) (14920+19870-10800)1492023990Total Liabilities and Owner's Equity8770097580 2)Life Positive's AccountIncome StatementDescription2021 ($)2022 ($)Sales5800062500Less: Cost of Goods Sold-19700-23000Gross Profit3830039500Deprecaition Expenses-3090-4590Other Expenses-2400-2800Earnings Before Interest and Taxes3281032110Interest Expenses-2340-2890Earnings Before Taxes3047029220Income Tax (32%)-9750-9350Net Earnings2072019870 3i)Calculation of Net New Equity for the year 2022Formula= Ending Common Stock - Beginning Common StockHereEnding Common Stock = $20000Beginning Common Stock = $ 17290Net New Equity for the year 2022 = $ 20000 - $ 17290= $ 2710 ii)Calculation of Change in Net Working Capital for the year 2022Formula= Net working Capital for Current Period - Net working capital for previous periodHereNet working Capital for Current period = ($28600+12340+8640) - ($21250 - $2340)= $49580 - $23590= $ 25990Net working Capital for Previous Period = ($23450+$15700+$7050) - ($24600+$2890)= $ 46200 - $ 27490= $ 18710Changes in Net Working Capital for 2022 = $ 25990 - $ 18710= $ 7280 iii)Calculation of Net Capital Spending for the year 2022Formula= Ending value of Net Fixed Assets - Beginning Value of net Fixed Assets + Depreciation Expenses for the current period= $ 48000 - $41500 + $ 4590= $ 11090 iv)Calculation of Operating Cash Flow for the year 2022Formula= Net Income + Non Cash Expenses (Depreciation) + Decrease in Accounts receivable + Increase in Inventory - Decrease in Accounts Payable - Decrease in Short term liabilitiesHere= $ 19870 + 4590 + 3360 - 1590 - 3350 - 550= $ 22330 1.Calculate the cash flow from assets, cash flow to creditors, and cash flow to stockholders for 2022. 2.Calculate the Dividends per Share and Earnings per Share for each year for Life-Positive’s Company.3.

Cash flow shows the movement of cash spending and income of a company over a specific time. A…

Answered: .Calculate the cash flow from assets,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Life-Positive’s Account Balances 2021 ($) 2022 ($)

Accounts Payable 24,600.00 21,250.00
Accounts receivable 15,700.00 12,340.00
Cash 23,450.00 28,600.00 Cost of goods sold 19,700.00 23,000.00
Depreciation 3,090.00 4,590.00
Dividends 5,800.00 10,800.00
Interest 2,340.00 2,890.00
Inventory 7,050.00 8,640.00
Long-term debt 28,000.00 30,000.00
Net fixed assets 41,500.00 48,000.00
Other expenses 2,400.00 2,800.00
Sales 58,000.00 62,500.00
Short-term Notes Payable 2,890.00 2,340.00

Shares outstanding 85,000.00 90,000.00

The tax rate is 32%

A balance sheet is a type of financial statement that shows the state of a company's finances at a certain moment in time. The balance sheet displays the company's assets, liabilities, and the difference between the two (equity).

The fundamental accounting equation, which asserts that: is followed by the balance sheet.

Liabilities + Equity Equals Assets

According to this formula, a company's total assets must equal its entire liabilities and equity. The assets of the business are listed on the left side of the balance sheet, and its liabilities and equity are listed on the right side.

Life Positive's Account
Balance Sheet
Assets	2021 ($)	2022 ($)
Cash	23450	28600
Accounts Receivable	15700	12340
Inventory	7050	8640
Net Fixed Assets	41500	48000
Total Assets	87700	97580
Liabilities and Owner's Equity
Accounts Payable	24600	21250
Short term Notes Payable	2890	2340
Long term Debt	28000	30000
Common Stock	17290	20000
Retained Earnings (20720-5800) (14920+19870-10800)	14920	23990
Total Liabilities and Owner's Equity	87700	97580

Life Positive's Account
Income Statement
Description	2021 ($)	2022 ($)
Sales	58000	62500
Less: Cost of Goods Sold	-19700	-23000
Gross Profit	38300	39500
Deprecaition Expenses	-3090	-4590
Other Expenses	-2400	-2800
Earnings Before Interest and Taxes	32810	32110
Interest Expenses	-2340	-2890
Earnings Before Taxes	30470	29220
Income Tax (32%)	-9750	-9350
Net Earnings	20720	19870

3i)

Calculation of Net New Equity for the year 2022

Formula

= Ending Common Stock - Beginning Common Stock

Here

Ending Common Stock = $20000

Beginning Common Stock = $ 17290

Net New Equity for the year 2022 = $ 20000 - $ 17290

= $ 2710

ii)

Calculation of Change in Net Working Capital for the year 2022

Formula

= Net working Capital for Current Period - Net working capital for previous period

Here

Net working Capital for Current period = ($28600+12340+8640) - ($21250 - $2340)

= $49580 - $23590

= $ 25990

Net working Capital for Previous Period = ($23450+$15700+$7050) - ($24600+$2890)

= $ 46200 - $ 27490

= $ 18710

Changes in Net Working Capital for 2022 = $ 25990 - $ 18710

= $ 7280

iii)

Calculation of Net Capital Spending for the year 2022

Formula

= Ending value of Net Fixed Assets - Beginning Value of net Fixed Assets + Depreciation Expenses for the current period

= $ 48000 - $41500 + $ 4590

= $ 11090

iv)

Calculation of Operating Cash Flow for the year 2022

Formula

= Net Income + Non Cash Expenses (Depreciation) + Decrease in Accounts receivable + Increase in Inventory - Decrease in Accounts Payable - Decrease in Short term liabilities

Here

= $ 19870 + 4590 + 3360 - 1590 - 3350 - 550

= $ 22330

1.Calculate the cash flow from assets, cash flow to creditors,
and cash flow to stockholders for 2022.

2.Calculate the Dividends per Share and Earnings per Share for
each year for Life-Positive’s Company.

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