Question 1

What are the sales for 2015?

Accepted Answer

According to the information given, the sales for 2015 were $4,600.

Question 2

Swell, Inc. had net ﬁxed assets of $6.5 million on December 31, 2014 and $11 million on December 31, 2015. If Swell's depreciation expense for 2015 was $750,000, what was the ﬁrm's 2015 capital
Spending?

Accepted Answer

The formula to calculate capital spending is: 
Capital Spending = Ending Net Fixed Assets – Beginning Net Fixed Assets + Depreciation Expense
Using this formula, we can calculate Swell's capital spending for 2015: 
Capital Spending = $11 million – $6.5 million + $750,000 
Capital Spending = $5.25 million 
Therefore, the answer is choice D.

Question 3

What is the operating cash ﬂow for 2015?

Accepted Answer

Operating cash flow for 2015 is calculated as follows:
Net income + Depreciation and amortization + Increase in accounts payable + Increase in accrued expenses + Increase in deferred revenue - Increase in accounts receivable - Increase in inventory
$363.90 + $33.00 + $9.00 + $5.00 + $24.00 - $22.00 - $11.00 = $401.90. Thus, the correct answer is C.

Question 4

At the end of the year, long-term debt was $255 and total debt was $390. The ﬁrm paid $20 of interest during the year. What is the amount of the cash ﬂow to creditors?

Accepted Answer

The answer of At the end of the year, long-term...

Question 5

The net working capital at the end of 2014 is ______ and ______ at the end of 2015.

Accepted Answer

The answer of The net working capital at the end...

Question 6

Suppose a ﬁrm's net income is $950, dividends paid total $300, and new equity sales over the same period amount to $311. If the initial value of equity was $7,100, what is the cash ﬂow to
Shareholders?

Accepted Answer

The answer of Suppose a ﬁrm's net income is $950,...

Question 7

The owner of Fred's Electronics is trying to sell the business. The company built a building four years ago at a cost of $2.2 million. The building is currently appraised at $2.46 million. The ﬁrm's
Equipment originally cost $1.2 million and is currently valued at $700,000. The inventory is listed on
The statement of ﬁnancial position at $150,000 but is only worth $125,000. The owner expects to
Collect 90 percent of the $300,000 in accounts receivable. The ﬁrm has $14,000 in cash and has
Total debt of $3.1 million. What is the market value of this ﬁrm?

Accepted Answer

The answer of The owner of Fred's Electronics is trying...

Question 8

Hi-Performance Motors has net income of $62,408. The ﬁrm pays out 55 percent of the net income to its shareholders as dividends. During the year, the company sold $125,000 worth of common
Stock. What is the cash ﬂow to stockholders?

Accepted Answer

The answer of Hi-Performance Motors has net income of $62,408....

Question 9

A $40,000 asset was purchased and classiﬁed as a Class 10 asset for CCA purposes. If the CCA rate is 30%, calculate CCA for year 5.

Accepted Answer

CCA for year 5 = $40,000 x 30% x 50% = $6,000 x 50% = $3,000

Question 10

Given the following statement of comprehensive income data, calculate revenue: Net Income = $2,500, EBIT = $4,000, Depreciation = $500, Operating expenses = $1,500.

Accepted Answer

The answer of Given the following statement of comprehensive income...

Question 11

The R.J. Ramboldt Co. paid dividends of $1,400, interest of $800, and taxes of $2,100 for the year. The tax rate is 35 percent and the depreciation expense is $500. What is the operating cash ﬂow
For the year?

Accepted Answer

Operating Cash Flow = Sales - Cost of Goods Sold - Depreciation - Taxes

We are not given the sales and cost of goods sold figures, but we can calculate them using the information provided:

Dividends + Interest + Taxes = $1,400 + $800 + $2,100 = $4,300

Since the tax rate is 35 percent, the taxable income can be calculated as:

Taxable Income = Dividends + Interest - Depreciation = $1,400 + $800 - $500 = $1,700

Now we can calculate the sales and cost of goods sold figures as:

Sales = Taxable Income / (1 - Tax Rate) = $1,700 / (1 - 0.35) = $2,615.38

Cost of Goods Sold = Sales - Operating Cash Flow + Depreciation = $2,615.38 - Operating Cash Flow + $500

Plugging in the values, we get:

$4,300 = $2,615.38 - Operating Cash Flow + $500 + $2,100

Solving for Operating Cash Flow, we get:

Operating Cash Flow = $5,215.38 - $4,300 = $915.38

Rounded to the nearest hundred, the answer is $5,200, which is choice C.

Question 12

An Ontario resident earned $40,000 in interest income and $60,000 in eligible dividends. Calculate the total tax paid.

Accepted Answer

The answer of An Ontario resident earned $40,000 in interest...

Question 13

What is cash ﬂow to creditors for 2015?

Accepted Answer

The answer of What is cash ﬂow to creditors for...

Question 14

Kathy's Krafts has sales of $820,000 and costs of $530,000. Interest expense is $35,000. The tax rate is 34% and the tax amount is $71,400. What is the amount of the depreciation expense if that is
The only remaining expense on the statement of comprehensive income?

Accepted Answer

The answer of Kathy's Krafts has sales of $820,000 and...

Question 15

The tax rates are as shown below. Your ﬁrm currently has taxable income of $98,650. How much additional tax will you owe if you increase your taxable income by $13,000?

Accepted Answer

The answer of The tax rates are as shown below....

Question 16

What is the amount of dividends paid in 2015 ($ in millions)?

Accepted Answer

The answer of What is the amount of dividends paid...

Question 17

A Quebec resident earned $40,000 in interest income and $60,000 in eligible dividends. Calculate the total tax paid.

Accepted Answer

The answer of A Quebec resident earned $40,000 in interest...

Question 18

A ﬁrm has recently purchased Class 10 equipment for $100,000 with a CCA rate of 30%. Under the half-year rule, what is the amount of depreciation that the ﬁrm can claim as a tax-deductible
Expense in the second year?

Accepted Answer

Under the half-year rule, only half of the CCA rate (which is 30%) can be claimed in the first year. Therefore, in the first year, the firm can claim a tax-deductible expense of $15,000 (30% x $100,000 x 0.5 = $15,000). In the second year, the remaining CCA rate of 15% can be claimed, which is $15,000 (30% x $100,000 x 0.5 x 0.5 = $7,500) multiplied by 2 for the second year, resulting in a total tax-deductible expense of $15,000 + $15,000 = $25,500. So, the correct answer is D.

Question 19

What is cash ﬂow to stockholders for 2015?

Accepted Answer

The answer of What is cash ﬂow to stockholders for...

Question 20

What is the cash ﬂow to stockholders for 2015?

Accepted Answer

The answer of What is the cash ﬂow to stockholders...

Quiz 2: Financial Statements, Taxes, and Cash Flow

What are the sales for 2015?

Swell, Inc. had net ﬁxed assets of $6.5 million on December 31, 2014 and $11 million on December 31, 2015. If Swell's depreciation expense for 2015 was $750,000, what was the ﬁrm's 2015 capital Spending?

What is the operating cash ﬂow for 2015?

At the end of the year, long-term debt was $255 and total debt was $390. The ﬁrm paid $20 of interest during the year. What is the amount of the cash ﬂow to creditors?

The net working capital at the end of 2014 is and at the end of 2015.

Suppose a ﬁrm's net income is $950, dividends paid total $300, and new equity sales over the same period amount to $311. If the initial value of equity was $7,100, what is the cash ﬂow to Shareholders?

Hi-Performance Motors has net income of $62,408. The ﬁrm pays out 55 percent of the net income to its shareholders as dividends. During the year, the company sold $125,000 worth of common Stock. What is the cash ﬂow to stockholders?

A $40,000 asset was purchased and classiﬁed as a Class 10 asset for CCA purposes. If the CCA rate is 30%, calculate CCA for year 5.

Given the following statement of comprehensive income data, calculate revenue: Net Income = $2,500, EBIT = $4,000, Depreciation = $500, Operating expenses = $1,500.

The R.J. Ramboldt Co. paid dividends of $1,400, interest of $800, and taxes of $2,100 for the year. The tax rate is 35 percent and the depreciation expense is $500. What is the operating cash ﬂow For the year?

An Ontario resident earned $40,000 in interest income and $60,000 in eligible dividends. Calculate the total tax paid.

What is cash ﬂow to creditors for 2015?

Kathy's Krafts has sales of $820,000 and costs of $530,000. Interest expense is $35,000. The tax rate is 34% and the tax amount is $71,400. What is the amount of the depreciation expense if that is The only remaining expense on the statement of comprehensive income?

The tax rates are as shown below. Your ﬁrm currently has taxable income of $98,650. How much additional tax will you owe if you increase your taxable income by $13,000?

What is the amount of dividends paid in 2015 ($ in millions) ?

A Quebec resident earned $40,000 in interest income and $60,000 in eligible dividends. Calculate the total tax paid.

A ﬁrm has recently purchased Class 10 equipment for $100,000 with a CCA rate of 30%. Under the half-year rule, what is the amount of depreciation that the ﬁrm can claim as a tax-deductible Expense in the second year?

What is cash ﬂow to stockholders for 2015?

What is the cash ﬂow to stockholders for 2015?