Assets: Cash Accounts receivable Inventories Total current assets Net fixed assets Total assets Liabilities and equity: Accounts payable Notes payable Total current liabilities. Long-term debt Common stock Retained earnings Total common equity Total liabilities and equity $ $ $ 2015 $ $ 200,000 864,000 2,000,000 3,064,000 6,000,000 9,064,000 $ 1,400,000 1,600,000 $3,000,000 2,400,000 3,000,000 664,000 3,664,000 9,064,000 $ 2014 170,000 700,000 1,400,000 $2,270,000 5,600,000 $7,870,000 $1,090,000 1,800,000 $2,890,000 2,400,000 2,000,000 580,000 $2,580,000 $7,870,000 If a firm has EBIT = 1,350,000 and 40% Tax rate, calculate Free Cash Flow.

Assets: Cash Accounts receivable Inventories Total current assets Net fixed assets Total assets Liabilities and equity: Accounts payable Notes payable Total current liabilities. Long-term debt Common stock Retained earnings Total common equity Total liabilities and equity $ $ $ 2015 $ $ 200,000 864,000 2,000,000 3,064,000 6,000,000 9,064,000 $ 1,400,000 1,600,000 $3,000,000 2,400,000 3,000,000 664,000 3,664,000 9,064,000 $ 2014 170,000 700,000 1,400,000 $2,270,000 5,600,000 $7,870,000 $1,090,000 1,800,000 $2,890,000 2,400,000 2,000,000 580,000 $2,580,000 $7,870,000 If a firm has EBIT = 1,350,000 and 40% Tax rate, calculate Free Cash Flow.

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Description: Assets:CashAccounts receivableInventoriesTotal current assetsNet fixed assetsTotal assetsLiabilities and equity:Accounts payableNotes payableTotal current liabilitiesLong-term debtCommon stockRetained earningsTotal common equityTotal liabilities and

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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Concept explainers

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

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Question

Assets:
Cash
Accounts receivable
Inventories
Total current assets
Net fixed assets
Total assets
Liabilities and equity:
Accounts payable
Notes payable
Total current liabilities
Long-term debt
Common stock
Retained earnings
Total common equity
Total liabilities and equity
$
$
$
$
$
$
$
2015
200,000
864,000
2,000,000
3,064,000
6,000,000
9,064,000
1,400,000
1,600,000
3,000,000
2,400,000
3,000,000
664,000
3,664,000
9,064,000
2014
170,000
700,000
1,400,000
$2,270,000
5,600,000
$7,870,000
$
$1,090,000
1,800,000
$2,890,000
2,400,000
2,000,000
580,00
$2,580,000
$7,870,000
If a firm has EBIT = 1,350,000 and 40% Tax rate, calculate Free Cash
Flow.

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