Fin 300 Ch. 2 Liu

Nielsen Auto Parts had beginning net fixed assets of $218,470 and ending net fixed assets of $209,411. During the year, assets with a combined book value of $6,943 were sold. Depreciation for the year was $42,822. What is the amount of net capital spending?

$ 33,763

Webster World has sales of $13,800, costs of $5,800, depreciation expense of $1,100, and interest expense of $700. What is the operating cash flow if the tax rate is 32 percent?

$ 6,016

he tax rates are as shown. Nevada Mining currently has taxable income of $97,800. How much additional tax will the firm owe if taxable income increases by $21,000? Taxable Income Tax Rate $0 - 50,000 15% 50,001 - 75,000 25% 75,001 - 100,000 34% 100,001 - 335,000 39%

$ 8,080

Net working capital is defined as:

Current assets minus current liabilities.

Depreciation for a tax-paying firm:

Increases expenses and lowers taxes.

The Dyrdek Co. had $276,000 in 2014 taxable income. Use the tax rates from Table 2.3. What is the marginal tax rate? (Enter your answer as a percent rounded to the nearest whole number, e.g., 32.)

Marginal tax rate: 39%

The percentage of the next dollar you earn that must be paid in taxes is referred to as the _____ tax rate.

Marginal.

At the beginning of the year, the long-term debt of a firm was $72,918 and total debt was $138,407. At the end of the year, long-term debt was $68,219 and total debt was $145,838. The interest paid was $6,430. What is the amount of the cash flow to creditors?

$11,129 Cash flow to creditors = $6,430 - ($68,219 - 72,918) = $11,129

The tax rates are as shown. Taxable Income Tax Rate $0 - 50,000 15% 50,001 - 75,000 25% 75,001 - 100,000 34% 100,001 - 335,000 39% What is the average tax rate for a firm with taxable income of $127,513?

25.86% Taxes paid = 0.15($50,000) + 0.25($75,000 - 50,000) + 0.34($100,000 - 75,000) + 0.39($127,513 - 100,000) = $32,980.07 Average tax rate = $32,980.07 / $127,513 = 25.86%

The Dyrdek Co. had $276,000 in 2014 taxable income. Use the tax rates from Table 2.3. What is the average tax rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Average Tax Rate: 32.9%

The cash flow of a firm that is available for distribution to the firm's creditors and stockholders is called the:

Cash flow from assets.

The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term debt of $6.3 million, and the 2015 balance sheet showed long-term debt of $6.7 million. The 2015 income statement showed an interest expense of $175,000. What was the firm's cash flow to creditors during 2015? (Negative amount should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

Cash flow to creditors: $(225,000)

The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed $580,000 in the common stock account and $3.5 million in the additional paid-in surplus account. The 2015 balance sheet showed $620,000 and $3.9 million in the same two accounts, respectively. If the company paid out $520,000 in cash dividends during 2015, what was the cash flow to stockholders for the year? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

Cash flow to stockholders: $

Billy's Exterminators, Inc., has sales of $655,000, costs of $304,000, depreciation expense of $56,000, interest expense of $38,000, a tax rate of 35 percent, and paid out $88,000 in cash dividends. The firm has 100,000 shares of common stock outstanding. What are the dividends per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Dividends per share: $.88

Billy's Exterminators, Inc., has sales of $655,000, costs of $304,000, depreciation expense of $56,000, interest expense of $38,000, a tax rate of 35 percent, and paid out $88,000 in cash dividends. The firm has 100,000 shares of common stock outstanding. What are the earnings per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Earnings per share: $1.67

Which of the following are current assets? I. Cash II. Trademark III. Accounts receivable IV. Notes payable

I. Cash & III. Accounts Receivable

The 2014 balance sheet of Steelo, Inc., showed current assets of $4,500 and current liabilities of $2,920. The 2015 balance sheet showed current assets of $3,000 and current liabilities of $1,530. What was the company's 2015 change in net working capital, or NWC? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.)

NWC: $(110)

Billy's Exterminators, Inc., has sales of $589,000, costs of $278,000, depreciation expense of $30,000, interest expense of $25,000, and a tax rate of 35 percent. What is the net income for this firm? (Do not round intermediate calculations.)

Net Income: $166,400

Which term relates to the cash flow that results from a firm's ongoing, normal business activities?

Operating cash flow.