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Volbeat Corp. shows the following information on its 2015 income statement: sales = $255,000; costs = $156,000; other expenses = $7,900; depreciation expense = $15,600; interest expense = $14,800; taxes = $21,245; dividends = $12,000. In addition, you’re told that the firm issued $6,300 in new equity during 2015 and redeemed $4,800 in outstanding long-term debt.a. What is the 2015 operating cash flow? (Do not round intermediate calculations.)Operating cash flow $b. What is the 2015 cash flow to creditors? (Do not round intermediate calculations.)Cash flow to creditors $c. What is the 2015 cash flow to stockholders? (Do not round intermediate calculations.)Cash flow to stockholders $d. If net fixed assets increased by $28,000 during the year, what was the addition to NWC? (Do not round intermediate calculations.)Addition to NWC $

Respuesta :

abiolataiwo2015

Answer:

A. $69,855

B. $19,600

C. $5,700

D. $28,000

Explanation:

A. Calculation for the operating cash flow

Using this formula

Operating cash flow = EBIT + Depreciation

First step is to find the EBIT using this formula

EBIT = Sales – Cost – Other expenses - Depreciation

Let plug in the formula

EBIT = 255,000 -156,000 – 7,900 -15,600

EBIT = 75,500

Now let calculate the Operating cash flow using this formula

Operating cash flow = EBIT + Depreciation

Let plug in the formula

Operating cash flow = 75,500 + 15,600 -21,245

Operating cash flow =$69,855

B. Calculation for the 2015 cash flow to creditors

Using this formula

Cash flow to creditor = Redeemed long term debt + Interest

Let plug in the formula

Cash flow to creditor= 4,800 + 14,800

Cash flow to creditor= $19,600

C. Calculation for 2015 cash flow to stockholders

Using this formula

Cash flow to stockholders = Dividends – Issued equity

Let plug in the formula

Cash flow to stockholders= 12,000 – 6,300

Cash flow to stockholders=$5,700

D.If net fixed assets increased by the amount of $28,000 the addition to Net Working Capital will be the same amount of $28,000 reason been NET WORKING Capital has the following :Current assets – Current liability + Fixed asset which are all part of current asset.

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