Presented below is the income statement of Cowan, Inc.: Sales revenue Cost of goods sold Gross profit Operating expenses Income before income taxes Income taxes Net income Cash $380,000 Accounts receivable 225,000 155,000 95,000 60,000 24,000 In addition, the following information related to net changes in working capital is presented: $36,000 Inventories Salaries payable (operating expenses) Accounts payable Income taxes payable Debit $12,000 25.000 8,000 3,000 Credit $19,400 14,000 The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $2,600.

Presented below is the income statement of Cowan, Inc.: Sales revenue Cost of goods sold Gross profit Operating expenses Income before income taxes Income taxes Net income Cash $380,000 Accounts receivable 225,000 155,000 95,000 60,000 24,000 In addition, the following information related to net changes in working capital is presented: $36,000 Inventories Salaries payable (operating expenses) Accounts payable Income taxes payable Debit $12,000 25.000 8,000 3,000 Credit $19,400 14,000 The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $2,600.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 32BEB

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Below is financial information ($ values are in millions) in a model. Net income during the year for this company would be: Revenues SG&A Expenses Interest Expense Select one: OA. $4.5 million OB. $3.6 million O C. $16.6 million OD. $0.9 million $67.30 $4.70 $8.10 Cost of Goods Sold Depreciation Tax Rate $43.20 $6.80 20%
Consider the following income statement: Sales Costs $ 602,184 391,776 Depreciation 89,100 Taxes Calculate the EBIT. EBIT 21% Calculate the net income. Net income
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Presented below is the income statement of Cowan, Inc for the year ended December 31, 2021. Sales € 380,000 Cost of goods sold 225,000 Gross profit 155,000 85,000 70,000 28,000 Operating expenses Income before income taxes Income taxes Net income € Cash Accounts receivable Inventories Salaries payable (operating expenses) Accounts payable Income tax payable In addition, the following information related to net changes in working capital is presented: Debit Credit 42,000 € 12,000 15,000 19,400 € 8,000 12,000 3,000 The company also indicates that depreciation expense for the year was £16,700 and that the deferred tax liability account increased £2,600. Required: Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows: a. Using the indirect method and interpret the result! b. Using the direct method and interpret the result!
Presented below is the income statement of Coming Company: Sales Cost of goods sold Gross profit Operating expenses Income before income taxes $305,000 180,000 $125,000 68,000 57,000 21,400 $35,600 Income taxes Net income In addition, the following information related to net changes in working capital is presented: Cash Accounts receivable Inventories Salaries payable (operating expenses) Accounts payable Income tax payable Debit $9,600 10,000 $15,620 6,400 9,500 2,400 Credit The company also indicates that depreciation expense for the year was $12,360 and that the deferred tax liability account increased $3,080. Required: (a) Compute the net cash flow from operating activities that would be shown on a statement of cash flows using the indirect method. (b) Compute the net cash flow from operating activities that would be shown on a statement of cash flows using the direct method. P47 PPT (c) State the major difference between the two methods in handling statement of cash flows.
Calculating the Average Total Assets and the Return on Assets The income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows. Also, assume a tax rate of 31%. Somerville CompanyIncome StatementFor the Year Ended December 31, 20X2 Amount Percent Net sales $8,281,989 100.0% Less: Cost of goods sold (5,383,293) 65.0 Gross margin $2,898,696 35.0 Less: Operating expenses (1,323,368) 16.0 Operating income $1,575,328 19.0 Less: Interest expense (50,000) 0.6 Income before taxes $1,525,328 18.4 Less: Income taxes (31%)* (472,852) 5.7 Net income $1,052,476 12.7 * Includes both state and federal taxes. Somerville CompanyStatement of Retained EarningsFor the Year Ended December 31, 20X2 Balance, beginning of period $1,979,155 Net income $1,052,476 Total $3,031,631 Preferred dividends (80,000) Dividends to common stockholders (201,887) Balance, end of period…
Consider the following income statement: Sales Costs Depreciation Taxes Calculate the EBIT. EBIT $748,168 486,752 110,700 Net income 23% Calculate the net income.
Below are extracts from the financial statements of Charlton Ltd: Statement of profit or loss for the year ended 31 December 2020 Revenue 214,550 Cost of sales (182,000) Gross profit 32,550 Investment income 4,760 Loss on disposal (40) (6,300) (3,500) Distribution costs Administrative expenses Profit from operations 27,470 Finance costs (2,800) Profit before tax 24,670 (2,100) 22,570 Income tax expense Profit for the period Statements of financial position 31 December 2020 31 December 2019 Assets Non-current assets Property, plant and equipment 15,920 5,950 Investments 17,500 17,500 33,420 23,450 31 December 2020 31 December 2019 Assets Non-current assets Property, plant and equipment 15,920 5,950 Investments 17,500 17,500 33,420 23,450 Current assets Inventories 7,000 13,650 Trade and other receivables 13,300 8,400 Cash and cash equivalents 2,870 1,120 23,170 23,170 Total assets 56,590 46,620 Equity and liabilities Capital and reserves Share capital 7,000 6,300 Share premium Retained…
Consider the following income statement: Sales $909,407 Costs 484,977 Depreciation 149,723 Taxes 0.28 Calculate OCF.
You are given the following information for Smashville, Inc. Cost of goods sold: Investment income: Net sales: Operating expense: Interest expense: Dividends: Tax rate: Current liabilities: Cash: Long-term debt: Other assets: Fixed assets: Other liabilities: Investments: Operating assets: Gross margin Operating margin Return on assets Return on equity $174,000 $ 1,400 $379,000 $ 86,000 $ 7,400 8,000 $ % % % % 40% $ 21,000 $ 21,000 $ 46,000 $ 38,000 $130,000 Calculate the gross margin, the operating margin, return on assets, and return on equity. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) $ 3,000 $ 34,000 $ 64,000
The condensed financial statements of Westward Corporation for 2009 and 2008 are presented below.Westward Corporation Westward CorporationBalance Sheet Income StatementDecember 31, 2009 For the Year Ended December 31, 2009Assets Revenues $2,000,000Current assets ExpensesCash and temporary Cost of goods sold 1,080,000investments $ 30,000Selling and administrativeAccounts receivable 70,000Expenses 495,000Inventories 120,000Interest expense 30,000Total current assets 220,000Total expenses 1,605,000Property, plant, and Incomebefore income taxes 395,000equipment (net) 780,000Income tax expense 140,000Total assets $1,000,000Net income $ 255,000Liabilities and Stockholders’ EquityCurrent liabilities $ 80,000Long-term liabilities 300,000Common stockholders’ equity 620,000Total liabilities and stockholders’ equity $1,000,000Westward Corporation Westward CorporationBalance Sheet Income StatementDecember 31, 2008 For the Year Ended December 31, 2008Assets Revenues $2,500,000Current assets…
using the attached data please calculate the Weighted average cost of capital. Revenue Costs of goods sold Gross profit SG&A expense Operating income Interest expense Other income (expense) Income before taxes Income taxes Net income after taxes Adjustments to net income Net income Diluted EPS Dividends per share 2008 9,885,556 6,233,420 3,652,136 2,081,801 1,570,335 323,289 (16,283) 1,230,763 372.587 858,176 (13,251) 844,925 2.61 1.52 Average Historic Yields 1-year 5-year 10-year 2009 10,011,331 6,442,075 3,569,256 2,066,810 1,502,446 275,485 92,922 1,319,883 375,483 944,400 (21,328) 923,072 2.89 1.66 1.21% 2010 10,494,983 6,700,677 3,794,306 2,235,078 1,559,228 250,574 (18,200) 1,290,454 358,514 931,940 30-year Moody's Aaa Moody's Baa 3-month commercial paper Heinz Capital Market Prices of Typical Issues (67,048) 864,892 2003 2004 2005 2006 1.22% 1.55% 3.33% 4.98% 2.85% 3.63% 3.90% 4.92% 3.89% 4.53% 4.21% 5.07% 2.71 1.68 4.79% 5.31% 4.61% 5.17% 5.53% 5.87% 5.21% 5.95% 6.65% 6.58%…