2-5A. (Measuring casb flows) Calculate the free cash flows for Pamplin, Inc., for the year ended December 31, 2003, both from an asset and a financing perspective. Interpret your results. Pamplin, Inc., Balance Sheet at 12/31/02 and 12/31/03 ASSETS 2002 2003 Cash $ 200 $ 150 Accounts receivable Inventory Current assets 450 425 550 1,200 2,200 Plant and equipment Less: accumulated depreciation Net plant and equipment Total assets 625 1,200 2,600 (1,200) 1,400 $2,600 (1,000) 1,200 $2,400 LIABILITIES AND OWNERS' EQUITY 2002 2003 $ 200 $ 150 Accounts payable Notes payable-current (9%) Current liabilities $ 200 600 150 $ 300 600 Long-term debt Owners' equity Common stock Paid-in capital Retained earnings Total owners' equity Total liabities and owners' equity $ 300 600 $ 300 600 700 $1,600 $2,400 800 $1,700 $2,600
2-5A. (Measuring casb flows) Calculate the free cash flows for Pamplin, Inc., for the year ended December 31, 2003, both from an asset and a financing perspective. Interpret your results. Pamplin, Inc., Balance Sheet at 12/31/02 and 12/31/03 ASSETS 2002 2003 Cash $ 200 $ 150 Accounts receivable Inventory Current assets 450 425 550 1,200 2,200 Plant and equipment Less: accumulated depreciation Net plant and equipment Total assets 625 1,200 2,600 (1,200) 1,400 $2,600 (1,000) 1,200 $2,400 LIABILITIES AND OWNERS' EQUITY 2002 2003 $ 200 $ 150 Accounts payable Notes payable-current (9%) Current liabilities $ 200 600 150 $ 300 600 Long-term debt Owners' equity Common stock Paid-in capital Retained earnings Total owners' equity Total liabities and owners' equity $ 300 600 $ 300 600 700 $1,600 $2,400 800 $1,700 $2,600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:2-5A. (Measuring casb flows) Calculate the free cash flows for Pamplin, Inc., for the year
ended December 31, 2003, both from an asset and a financing perspective. Interpret your
results.
Pamplin, Ic., Balance Sheet at 12/31/02 and 12/31/03
ASSETS
2002
2003
Cash
$ 200
$ 150
Accounts receivable
450
425
550
1,200
2,200
(1,000)
1,200
Inventory
Current assets
625
Plant and equipment
Less: accumulated depreciation
Net plant and equipment
Total assets
1,200
2,600
(1,200)
1,400
$2,600
$2,400
LIABILITIES AND OWNERS' EQUITY
2002
2003
$ 200
$ 150
Accounts payable
Notes payable-current (9%)
Current liabilities
150
$ 300
$ 200
Long-term debt
Owners' equity
Common stock
Paid-in capital
Retained earnings
Total owners' equity
Total liabiities and owners' equity
600
600
$ 300
$ 300
600
600
700
800
$1,600
$2,400
$1,700
$2,600
CHAPTER 2 UNDERSTANDING FINANCIAL STATEMENTS, TAXES, AND CASH FLOWS
55
Pamplin, Inc. Income Statement
for years ending 12/31/02 and 12/31/03 ($ in thousands)
2002
2003
$1,200
700
$ 500
30
Sales
$1,450
Cost of goods sold
Gross profit
Operating expenses
Depreciation
Net operating income
Interest expense
850
$ 600
40
220
200
$ 360
$ 250
50
$ 200
60
Net income before taxes
$ 300
Taxes (40%)
Net income
80
120
$ 120
$ 180
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education