The 2017 balance sheet of Kerber's Tennis Shop, Incorporated, showed $2.45 million inlong-term debt, $730,000 in the common stock account, and $6.15 million in theadditional paid-in surplus account. The 2018 balance sheet showed $3.6 million,$975,000, and $8.45 million in the same three accounts, respectively. The 2018 incomestatement showed an interest expense of $330,000. The company paid out $540,000 incash dividends during 2018. If the firm's net capital spending for 2018 was $790,000,and the firm reduced its net working capital investment by $125,000, what was the firm's2018 operating cash flow, or OCF?Multiple ChoiceOO$3,075,000$-4,570,000$-2,160,000$-2,825,000$-3,240,000

Particulars20172018Long-term debt$2,450,000.00$3,600,000.00Common…

Answered: The 2017 balance sheet of Kerber's…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 23MCQ

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The 2017 balance sheet of Kerber’s Tennis Shop, Incorporated, showed $2.4 million in long-term debt, $720,000 in the common stock account, and $6.05 million in the additional paid-in surplus account. The 2018 balance sheet showed $4.1 million, $895,000, and $8.3 million in the same three accounts, respectively. The 2018 income statement showed an interest expense of $190,000. The company paid out $600,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $860,000, and the firm reduced its net working capital investment by $115,000, what was the firm's 2018 operating cash flow, or OCF?
The 2017 balance sheet of Kerber's Tennis Shop , Incorporated, showed $2.4 million long-term debt, $760,000 in the common stock account, and $5.95 million in the additional paid-in surplus account. The 2018 balance sheet showed $3.95 million $985,000, and $8.05 million in the same three accounts , respectively . The 2018 income statement showed an interest expense of $ 310,000 . The company paid out $590,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $690,000 , and the firm reduced its net working capital Investment by $185,000 , what was the firm's 2018 operating cash flow , or OCF ? Typed solution
Home Depot entered fiscal 2017 with a total capitalization of $21,904 million. In 2017, debt investors received interest income of $877 million. Net income to shareholders was $8,654 million. (Assume a tax rate of 21%.) Calculate the economic value added assuming its cost of capital is 10%. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
The 2008 balance sheet of a company showed long-term debt of $4.6 million, $1,740,000 in the common stock account and $4.2 million in the additional paid-in surplus account. The 2009 balance sheet showed long-term debt of $4.9 million, $1,815,000 in common stock account and $4.5 million in the additional paid-in surplus account. The 2009 income statement showed an interest expense of $870,000 and dividends of $590,000. You also know that the firm’s net capital spending for 2009 was $1, 440,000 and the firm’s net working capital was reduced by $95,000. What was the firm’s cash flow to creditors during 2009 and the firms cash flow to stockholders in 2009? What was the firm’s operating cash flow, OCF for 2009? What is the value for FCF?
Square Hammer Corporation shows the following information on its 2018 income statement: Sales = $196,000; Costs = $84,000; Other expenses = $5,100; Depreciation expense = $9,000; Interest expense = $13,300; Taxes = $29,610; Dividends = $10,300. In addition, you're told that the firm issued $7,100 in new equity during 2018 and redeemed $8,700 in outstanding long-term debt. a. What is the 2018 operating cash flow? Operating cash flow b. What is the 2018 cash flow to creditors? Cash flow to creditors
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At year-end 2018, Wallace Landscaping's total assets were $2.17 million, and its accounts payable were $470,000. Sales, which in 2018 were $2.2 million, are expected to increase by 30% in 2019. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $505,000 in 2018, and retained earnings were $345,000. Wallace has arranged to sell $60,000 of new common stock in 2019 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2019. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 7%, and 45% of earnings will be paid out as dividends. a. What was Wallace's total long-term debt in 2018? Do not round intermediate calculations. Round your answer to the nearest dollar. $ What…
Home Depot entered fiscal 2017 with a total capitalization of $21,907 million. In 2017, debt investors received an interest income of $878 million. Net income to shareholders was $8,657 million. (Assume a tax rate of 21%.) Calculate the economic value-added assuming its cost of capital is 10%
The Murdock Corporation reported the following balance sheet data for 2018 and 2017: 2018 2017 Cash $ 98,465 $ 34,355 Available-for-sale debt securities (not cash equivalents) 25,000 104,000 Accounts receivable 99,000 85,350 Inventory 184,000 162,100 Prepaid insurance 3,210 3,900 Land, buildings, and equipment 1,288,000 1,144,000 Accumulated depreciation (629,000 ) (591,000 ) Total assets $ 1,068,675 $ 942,705 Accounts payable $ 93,440 $ 167,670 Salaries payable 27,600 34,000 Notes payable (current) 42,100 94,000 Bonds payable 219,000 0 Common stock 300,000 300,000 Retained earnings 386,535 347,035 Total liabilities and shareholders' equity $ 1,068,675 $ 942,705 Additional information for 2018: (1.) Sold available-for-sale debt securities costing $79,000 for $85,400. (2.)…
The Sandhill Company has disclosed the following financial information in its annual reports for the period ending March 31, 2017: sales of $1.423 million, cost of goods sold of $802,000, depreciation expenses of $175,000, and interest expenses of $89,575. Assume that the firm has an average tax rate of 35 percent. Compute the cash flows to investors from operating activity. (Round answer to 2 decimal places, e.g. 15.25.) Cash flow from operating activity $enter the Cash flow from operating activity rounded to 2 decimal places
At May 31, 2016, FedEx Corporation reported the following amounts (in millions) in its financial statements: 2016 2015 Total Assets $ 13,200 $ 12,300 Total Liabilities 8,316 7,503 Interest Expense 300 300 Income Tax Expense 480 290 Net Income 1,080 1,000 Required: 1.Compute the debt-to-assets ratio and times interest earned ratio for 2016 and 2015. (Round your answers to 2 decimal places.)

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