Common stock 100000 90000 Retained earnings 62624 38774 Total common equity

Common stock 100000 90000 retained earnings 62624

This preview shows page 1 out of 1 page.

Common stock $100,000 $90,000 Retained earnings 62,624 38,774 Total common equity $162,624 $128,774 Total liabilities and equity $316,770 $252,670 Check for balancing (this should be zero): c. Construct the statement of cash flows for the most recent year. Statement of Cash Flows (in thousands of dollars) Operating Activities Net Income $31,800 Adjustments: Noncash adjustment: Depreciation $6,700 Due to changes in working capital: Due to change in accounts receivable ($22,943) Due to change in inventories ($3,468) Due to change in accounts payable $7,652 Due to change in accruals $7,749 Net cash provided (used) by operating activities $27,490 Investing Activities Cash used to acquire gross fixed assets $17,864 Due to change in short-term investments $3,700 Net cash provided (used) by investing activities $21,564 Financing Activities Due to change in notes payable ($1,500) Due to change in long-term debt $16,349 Due to change in common stock $10,000 Payment of common dividends $7,950 Net cash provided (used) by financing activities $32,799 Net increase/decrease in cash $16,825 Add: Cash balance at the beginning of the year $74,625 Cash balance at the end of the year $91,450 a. Cumberland Industries' most recent sales were $455,000,000; operating costs (excluding depreciation) were equal to 85% of sales; net fixed assets were $67,000,000; depreciation amounted to 10% of net fixed assets; interest expenses were $8,550,000; the state-plus-federal corporate tax rate was 40% and Cumberland paid 25% of its net income out in dividends. Given this information, construct Cumberland's income statement. Also calculate total dividends and the addition to retained earnings. The input information required for the problem is outlined in the "Key Input Data" section below. Using this data and the balance sheet above, we constructed the income statement shown below. b. Cumberland Industries' partial balance sheets are shown below. Cumberland issued $10,000,000 of new common stock in the most recent year. Using this information and the results from part a, fill in the missing values for common stock, retained earnings, total common equity, and total liabilities and equity.
Image of page 1

You've reached the end of your free preview.

Want to read the whole page?

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes