South Sea Baubles has the following (incomplete) balance sheet and income statement. BALANCE SHEET AT END OF YEAR Assets Current assets Net fixed assets 2021 $ 97 870 INCOME STATEMENT, 2022 (Figures in $ millions) Revenue Cost of goods sold Depreciation Interest expense $ 1,985 1,065 385 247 (Figures in $ millions) 2022 Liabilities and Shareholders' Equity 2021 2022 $ 175 Current liabilities $ 64 $ 81 970 Long-term debt 635 820 a&b. What is shareholders' equity in 2021 and 2022? c&d. What is net working capital in 2021 and 2022? e. What are taxes paid in 2022? Assume the firm pays taxes equal to 21% of taxable income. f. What is cash provided by operations during 2022? g.Net fixed assets increased from $870 million to $970 million during 2022. What must have been South Sea's gross investment in fixed assets during 2022? h. If South Sea reduced its outstanding accounts payable by $42 million during the year, what must have happened to its other current liabilities?
South Sea Baubles has the following (incomplete) balance sheet and income statement. BALANCE SHEET AT END OF YEAR Assets Current assets Net fixed assets 2021 $ 97 870 INCOME STATEMENT, 2022 (Figures in $ millions) Revenue Cost of goods sold Depreciation Interest expense $ 1,985 1,065 385 247 (Figures in $ millions) 2022 Liabilities and Shareholders' Equity 2021 2022 $ 175 Current liabilities $ 64 $ 81 970 Long-term debt 635 820 a&b. What is shareholders' equity in 2021 and 2022? c&d. What is net working capital in 2021 and 2022? e. What are taxes paid in 2022? Assume the firm pays taxes equal to 21% of taxable income. f. What is cash provided by operations during 2022? g.Net fixed assets increased from $870 million to $970 million during 2022. What must have been South Sea's gross investment in fixed assets during 2022? h. If South Sea reduced its outstanding accounts payable by $42 million during the year, what must have happened to its other current liabilities?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:South Sea Baubles has the following (incomplete) balance sheet and income statement.
BALANCE SHEET AT END OF YEAR
(Figures in $ millions)
2021
$ 97
870
2022
Liabilities and Shareholders' Equity
2021
2022
$ 175
970
Current liabilities
Long-term debt
$ 64
635
$ 81
820
Assets
Current assets
Net fixed assets
INCOME STATEMENT, 2022
(Figures in $ millions)
Revenue
Cost of goods sold
Depreciation
Interest expense
$ 1,985
1,065
385
247
a&b. What is shareholders' equity in 2021 and 2022?
c&d. What is net working capital in 2021 and 2022?
e. What are taxes paid in 2022? Assume the firm pays taxes equal to 21% of taxable income.
f. What is cash provided by operations during 2022?
g.Net fixed assets increased from $870 million to $970 million during 2022. What must have been South Sea's gross investment in
fixed assets during 2022?
h. If South Sea reduced its outstanding accounts payable by $42 million during the year, what must have happened to its other current
liabilities?
Complete this question by entering your answers in the tabs below.
Req A and B Req C and D
Req E
Req F
Req G
Req H
What are taxes paid in 2022? Assume the firm pays taxes equal to 21% of taxable income.
Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.
Cash provided by operations
_
million
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Step 1: Define balance sheet:
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VIEWStep 4: Determine the taxes paid in 2022:
VIEWStep 5: Determine the cash provided by operation:
VIEWStep 6: Determine the gross investment in fixed assets:
VIEWStep 7: Determine what happened to other liabilities if accounts payable is reduced:
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