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Prescott Football Manufacturing had the following operating results for 2019: sales = $30,174; cost of goods sold = $21,740; depreciation expense = $3,512; interest expense = $544; dividends paid = $849. At the beginning of the year, net fixed assets were $20,046, current assets were $3,029, and current liabilities were $3,776. At the end of the year, net fixed assets were $23,077, current assets were $4,447, and current liabilities were $3,077. The tax rate for 2019 was 21 percent.
a. What is net income for 2016? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)Net income $b. What is the operating cash flow for 2016? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)Operating cash flow $c. What is the cash flow from assets for 2016? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)Cash flow from assets $Assume no new debt was issued during the year.d. What is the cash flow to creditors for 2016? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)Cash flow to creditors $e. What is the cash flow to stockholders for 2016? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)Cash flow to stockholders $

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anthougo

Answer:

Prescott Football Manufacturing

a. Net Income for 2019:

2019: sales =                  $30,174

cost of goods sold =      $21,740

depreciation expense =  $3,512

interest expense =            $544

Pre-tax Income   =          $4,378

21% Tax              =                919-38

Net Income        =        $3,459

b) Operating cash flow

Net Income    =                     $3,459

Non-cash:

Depreciation Expense             3512

Increase in current assets      -1,418

Decrease in current liabilities -699

Net operating cash flow     $4,854

c) Cash flow from assets:

Increase in Assets   -$3,031`

d) Cash flow to creditors:

Decrease in liabilities -$699

e) Cash flows to stockholders:

Dividends paid =               -$849

Explanation:

a) 2019: sales =                  $30,174

cost of goods sold =      $21,740

depreciation expense =  $3,512

interest expense =            $544

Pre-tax Income   =          $4,378

21% Tax              =                919

Net Income        =          $3,459

dividends paid =               $849.

b) Balance Sheet:

At the beginning of the year,

net fixed assets were $20,046,

current assets were $3,029, and

current liabilities were $3,776.

c) Balance at the end of the year,

At the end of the year,

net fixed assets were $23,077,

current assets were      $4,447, and

current liabilities were $3,077.

                          Prescott Football Manufacturing

Part A:

Net Income for 2016:

  • Sales =                            $30,174
  • Cost of goods sold =      $21,740
  • Depreciation expense = $3,512
  • Interest expense =         $544
  • Pre-tax Income   =          $4,378
  • 21% Tax               =           919-38

         Net Income        =        $3,459

Working Notes:  

  • sales =                  $30,174
  • cost of goods sold =      $21,740
  • depreciation expense =  $3,512
  • interest expense =            $544
  • Pre-tax Income   =          $4,378
  • 21% Tax              =                919
  • Net Income        =          $3,459
  • dividends paid =               $849.

Part B:

Operating cash flow

  • Net Income    =                     $3,459

         Non-cash:

  • Depreciation Expense             3512
  • Increase in current assets      -1,418
  • Decrease in current liabilities -699
  • Net operating cash flow     $4,854

Working Notes :

  • At the beginning of the year,
  • Net fixed assets were $20,046,
  • Current assets were $3,029,
  • Current liabilities were $3,776.

Part C:

Cash flow from assets:

Increase in Assets   -$3,031`

Working Notes :

  • Balance at the end of the year,
  • At the end of the year,
  • net fixed assets were $23,077,
  • current assets were      $4,447,  
  • current liabilities were $3,077.

Part D :

Cash flow to creditors:

Decrease in liabilities = -$699

Part E :

Cash flows to stockholders:

Dividends paid =-$849

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