The income statement of L Industries.

Question

A comparative balance sheet and income statement is shown for Cruz, Incorporated. CRUZ, INCORPORATED Comparative Balance Sheets At December 31 2021 2020 Assets Cash Accounts receivable, net $ 85,600 36,800 $ 21,300 Prepaid expenses Inventory Total current assets Furniture Accumulated depreciation-Furniture Total assets Liabilities and Equity Accounts payable Wages payable 77,100 45,200 84,900 4,700 3,900 204,200 155,300 94,700 (14,700) $ 284,200 $ 13,400 8,000 (8,400) $ 257,400 $ 19,000 4,500 110,500 Income taxes payable 1,400 2,500 Total current liabilities Notes payable (long-term) Total liabilities Equity Common stock, $5 par value Retained earnings 22,800 26,000 28,900 66,400 51,700 92,400 204,000 28,500 162,300 2,700 Total liabilities and equity $ 284,200 $ 257,400 CRUZ, INCORPORATED Income Statement Sales For Year Ended December 31, 2021 $ 440,700 283,700 157,000 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Income before taxes…

Answer 1

Question

Chapter 3, Problem 19SP

a.

Summary Introduction

To prepare: The income statement of L Industries.

b.

Summary Introduction

To prepare: The stockholders’ equity and the cash flow statement of L Industries.

c.

Summary Introduction

To determine: The net operating working capital for the year 2018 and 2019 and the free cash flow of L industries.

d.

Summary Introduction

To determine: The effect on corporate taxes and the taxes paid by shareholders of the company, on increasing the dividend payout ratio.

e.

Summary Introduction

To determine: The EVA of the L Industries.

f.

Summary Introduction

To determine: The MVA of the L Industries.

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A comparative balance sheet and income statement is shown for Cruz, Incorporated. CRUZ, INCORPORATED Comparative Balance Sheets At December 31 2021 2020 Assets Cash Accounts receivable, net $ 85,600 36,800 $ 21,300 Prepaid expenses Inventory Total current assets Furniture Accumulated depreciation-Furniture Total assets Liabilities and Equity Accounts payable Wages payable 77,100 45,200 84,900 4,700 3,900 204,200 155,300 94,700 (14,700) $ 284,200 $ 13,400 8,000 (8,400) $ 257,400 $ 19,000 4,500 110,500 Income taxes payable 1,400 2,500 Total current liabilities Notes payable (long-term) Total liabilities Equity Common stock, $5 par value Retained earnings 22,800 26,000 28,900 66,400 51,700 92,400 204,000 28,500 162,300 2,700 Total liabilities and equity $ 284,200 $ 257,400 CRUZ, INCORPORATED Income Statement Sales For Year Ended December 31, 2021 $ 440,700 283,700 157,000 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Income before taxes…

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Answer 2

Question

Chapter 3, Problem 19SP

a.

Summary Introduction

To prepare: The income statement of L Industries.

b.

Summary Introduction

To prepare: The stockholders’ equity and the cash flow statement of L Industries.

c.

Summary Introduction

To determine: The net operating working capital for the year 2018 and 2019 and the free cash flow of L industries.

d.

Summary Introduction

To determine: The effect on corporate taxes and the taxes paid by shareholders of the company, on increasing the dividend payout ratio.

e.

Summary Introduction

To determine: The EVA of the L Industries.

f.

Summary Introduction

To determine: The MVA of the L Industries.

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Answer 3

Question

Chapter 3, Problem 19SP

a.

Summary Introduction

To prepare: The income statement of L Industries.

b.

Summary Introduction

To prepare: The stockholders’ equity and the cash flow statement of L Industries.

c.

Summary Introduction

To determine: The net operating working capital for the year 2018 and 2019 and the free cash flow of L industries.

d.

Summary Introduction

To determine: The effect on corporate taxes and the taxes paid by shareholders of the company, on increasing the dividend payout ratio.

e.

Summary Introduction

To determine: The EVA of the L Industries.

f.

Summary Introduction

To determine: The MVA of the L Industries.

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Answer 4

Question

Chapter 3, Problem 19SP

a.

Summary Introduction

To prepare: The income statement of L Industries.

b.

Summary Introduction

To prepare: The stockholders’ equity and the cash flow statement of L Industries.

c.

Summary Introduction

To determine: The net operating working capital for the year 2018 and 2019 and the free cash flow of L industries.

d.

Summary Introduction

To determine: The effect on corporate taxes and the taxes paid by shareholders of the company, on increasing the dividend payout ratio.

e.

Summary Introduction

To determine: The EVA of the L Industries.

f.

Summary Introduction

To determine: The MVA of the L Industries.

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Answer 5

Chapter 3, Problem 19SP

a.

Summary Introduction

To prepare: The income statement of L Industries.

b.

Summary Introduction

To prepare: The stockholders’ equity and the cash flow statement of L Industries.

c.

Summary Introduction

To determine: The net operating working capital for the year 2018 and 2019 and the free cash flow of L industries.

d.

Summary Introduction

To determine: The effect on corporate taxes and the taxes paid by shareholders of the company, on increasing the dividend payout ratio.

e.

Summary Introduction

To determine: The EVA of the L Industries.

f.

Summary Introduction

To determine: The MVA of the L Industries.

Answer 6

Chapter 3, Problem 19SP

a.

Summary Introduction

To prepare: The income statement of L Industries.

Answer 7

Chapter 3, Problem 19SP

a.

Summary Introduction

To prepare: The income statement of L Industries.

Answer 8

b.

Summary Introduction

To prepare: The stockholders’ equity and the cash flow statement of L Industries.

Answer 9

b.

Summary Introduction

To prepare: The stockholders’ equity and the cash flow statement of L Industries.

Answer 10

c.

Summary Introduction

To determine: The net operating working capital for the year 2018 and 2019 and the free cash flow of L industries.

Answer 11

c.

Summary Introduction

To determine: The net operating working capital for the year 2018 and 2019 and the free cash flow of L industries.

Answer 12

d.

Summary Introduction

To determine: The effect on corporate taxes and the taxes paid by shareholders of the company, on increasing the dividend payout ratio.

Answer 13

d.

Summary Introduction

To determine: The effect on corporate taxes and the taxes paid by shareholders of the company, on increasing the dividend payout ratio.

Answer 14

e.

Summary Introduction

To determine: The EVA of the L Industries.

Answer 15

e.

Summary Introduction

To determine: The EVA of the L Industries.

Answer 16

f.

Summary Introduction

To determine: The MVA of the L Industries.

Answer 17

f.

Summary Introduction

To determine: The MVA of the L Industries.

Answer 18

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Answer 19

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Ch. 3 - Prob. 1Q Ch. 3 - Who are some of the basic users of financial...Ch. 3 - If a typical firm reports 20 million of retained...Ch. 3 - Explain the following statement: Although the...Ch. 3 - Prob. 5Q Ch. 3 - Prob. 6Q Ch. 3 - Prob. 7Q Ch. 3 - Prob. 8Q Ch. 3 - How are managements actions incorporated in EVA...Ch. 3 - Prob. 10Q

The income statement of L Industries.

Solution Summary: The author calculates the net operating working capital and free cash flow of L industries using an excel spreadsheet.

To prepare: The income statement of L Industries.

To prepare: The stockholders’ equity and the cash flow statement of L Industries.

To determine: The net operating working capital for the year 2018 and 2019 and the free cash flow of L industries.

To determine: The effect on corporate taxes and the taxes paid by shareholders of the company, on increasing the dividend payout ratio.

To determine: The EVA of the L Industries.

To determine: The MVA of the L Industries.

Chapter 3 Solutions