eoc_chapter_02

# eoc_chapter_02 - Chapter 2 Problems 1-22 Input boxes in tan...

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Chapter 2 Problems 1-22 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green

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Chapter 2 Question 1 Input area: Current assets \$2,800 Net fixed assets 6,000 Current liabilities \$1,600 Long-term debt 5,200 Output area: Balance sheet Current assets \$2,800 Current liabilities \$1,600 Net fixed assets 6,000 Long-term debt 5,200 Owner's equity 2,000 Total liabilities Total assets \$8,800 +total equity \$8,800 Owner's equity = Total assets +Total liabilities = \$2,000 Net working capital = Current assets - Current liabilities = \$1,200

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Chapter 2 Questions 2-4 Input area: Sales \$425,000 Costs 210,000 Depreciation expense 63,000 Interest expense 38,000 Tax rate 35% Cash dividends \$35,000 Common s\tock (shares) 30,000 Output area: Income Statement Sales \$425,000 Costs 210,000 Depreciation expense 63,000 EBIT 152,000 Interest expense \$38,000 EBT \$114,000 Taxes \$39,900 Net income \$74,100 Addition to retained earnings = Net income - Cas Earnings per share = Net income / Common sto Dividends per share = Cash dividends / Commo
sh dividends = \$39,100 ck outstanding = \$2.47 on stock outstanding = \$1.167

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Chapter 2 Question 5 Input area: Book value of net fixed assets \$2,100,000 Book value of current liabilities 750,000 Net working capital \$600,000 Market value of net fixed assets \$4,000,000 Market value of current assets 1,250,000 Output area: Net working capital \$600,000 Current liabilities 750,000 Book value of current assets \$1,350,000 Book value of net fixed assets 2,100,000 Book value of total assets \$3,450,000 Market value of net fixed assets \$4,000,000 Market value of current assets 1,250,000 Market value of total assets \$5,250,000
Chapter 2 Questions 6,7 Input area: 1999 Taxable income \$310,000 Taxable income 0 - 50,000 15% 50,001 - 75,000 25% 75,001 - 100,000 34% 100,001 - 335,000 39% 335,001 - 10,000,000 34% 10,000,001 - 15,000,000 35% 15,000,001 - 18,333,333 38% 18,333,334 + 35% Output area: Taxes: 15% \$50,000 25% 25,000 34% 25,000 39% 210,000 34% 0 35% 0 38% 0 35% 0 104,150 Average tax rate: \$104,150 = 33.60% 310,000 The marginal tax rate is 39%.

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Chapter 2 Question 8 Input area: Sales \$9,620 Costs 4,840 Depreciation Expense 1,300 Interest Expense 1,210 Tax rate 35% Output area: Income Statement Sales \$9,620.00 Costs 4,840.00 Depreciation Expense: 1,300.00 EBIT 3,480.00 Interest Expense: \$1,210.00 EBT \$2,270.00 Taxes 794.50 Net Income \$1,475.50 Operating cash flow = EBIT + Depreciation - Taxes = \$3,985.50
Chapter 2 Question 9 Input area: Dec. 31, 2002 net fixed assets \$2,800,000 Dec. 31, 2003 net fixed assets 3,100,000 Depreciation expense \$510,000 Output area: Net capital spending = 2003 NFA - 2002 NFA + Depreciation =

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\$810,000
Chapter 2 Question 10 Input area: Dec. 31, 2002 Current assets \$800 Dec. 31, 2002 Current liabilities 280 Dec. 31, 2003 current assets \$860 Dec. 31, 2003 current liabilities 415 Output area: Additions to net working capital = 2003 Net working cap

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pital - 2002 Net working capital = \$(75)
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## This note was uploaded on 05/01/2009 for the course FINC 106 taught by Professor Dr.nehale during the Spring '09 term at Baptist College of Health Sciences.

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eoc_chapter_02 - Chapter 2 Problems 1-22 Input boxes in tan...

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