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Finance - Prepare a cash flow statement for the following information.




Question;Question 1.a. Prepare a cash flow statement for the following information.b. Include a cash reconciliation statement. Balance SheetJan 1 Dec 31ASSETS:Current Assets:Cash 310,000 600,000Marketable Securities 1,200,000 1,000,000Accounts Receivable, net 290,000 330,000Inventory 3,000,000 4,000,000Prepaid Expenses 200,000 300,000Total Current Assets 5,000,000 6,230,000Total Fixed Assets, net 2,500,000 2,000,000Total Assets 7,500,000 8,230,000LIABILITIES & EQUITIESCurrent Liabilities:Accounts Payable 1,500,000 1,000,000Notes Payable 1,000,000 1,000,000Accrued Expenses 500,000 800,000Total Current Liabilities 3,000,000 2,800,000Total Long-term Liabilities 1,000,000 1,500,000Total Liabilities 4,000,000 4,300,000Preferred Stock 500,000 500,000Common Stock 500,000 500,000Capital in Excess of Par 1,000,000 1,000,000 Retained Earnings 1,500,000 1,930,000Total Stockholders Equity 3,500,000 3,930,000Total Liabilities and Equity 7,500,000 8,230,000Income Statement (for ques 1)Sales 10,000,000COGS 6,000,000Gross Profit 4,000,000Administrative expenses 1,200,000Depreciation 500,000EBIT 2,300,000Interest Expense 500,000EBT 1,800,000Taxes (40%) 720,000Net Income 1,080,000Question 2 Table 5-1Income Statement Balance SheetSales $20,000,000 Assets:Cost of Goods Sold 8,000,000 Cash $ 5,000,00012,000,000 Marketable Securities 12,500,000Selling and Administrative 1,600,000 Accounts Receivable, net 2,500,000Depreciation 3,000,000 Inventory 30,000,0007,400,000 Prepaid Expenses 5,000,000Interest 2.000,000 Plant & Equipment 30,000,0005,400,000 Taxes (40%) 2,160,000 Total Assets 85,000,0003,240,000 Common Stock Div. 600,000 Liabilities and Equity:$2,640,000 Accounts Payable $20,000,000Notes Payable 5,000,000Accrued Expenses 5,000,000Bonds 25,000,000Common Stock 5,000,000Capital in Excess of Par 10,000,000Retained Earnings 15,000,000Total Liabilities andEquity $85,000,000Shares outstanding of common stock = 1,000,000Market price of common stock = $18.Use Table 5-1 for the following 15 questions.2-1. The Current Ratio is:2-2. The Net Profit margin is:2-3. The Quick Ratio is:2-4. The Times Interest Earned ratio is:2-5. The Earnings Per Share is:2-6. The Gross Profit Margin is:2-7. The Total Debt to Total Asset ratio is:2-8. Return on Assets ratio is:2-9. The Total Asset Turnover ratio is:2-10. The Operating Profit Margin is:2-11. The Average Collection Period (365 day year) is:2-12. The Market to Book ratio is:2-13. The Debt to Equity ratio is:2-14. The Inventory Turnover ratio is:2-15. The Return on Equity is:For Questions 3 through 9, please provide 2 answers for the same question, using 2 different solution methods (i.e., factor tables, MS Excel, financial calculator, or algebraically.Question 3Calculate the present value of annual payments of $3,000 per year for ten years at 8%:a. Ordinary Annuityb. Annuity DueQuestion 4How much will you have at the end of the 6th year if you invest $5,000 annually for sixyears at 7% annual rate, if you:a. Start one year from todayb. Start todayQuestion 5How long it will take for $2,500 to become $8,865 if it is deposited and earns 5% peryear compounded annually? (Calculate to the closest year.)Question 6Sum the present values of the following cashflows to be received at the end of each of thenext six years $1,500, $3,500, $3,750, $4,250, $5,000, $5,000 when the annual discountrate is 4%.Question 7A bank agrees to give you a loan of $12,000,000 and you have to pay $1,309,908 peryear (end of year) for 26 years. What is your rate of interest?Question 8Calculate the present value of each of the alternatives below, if the discount rate is 12%.a. $45,000 today in one lump sum.b. $70,000 paid to you in seven equal payments of $10,000 each at the end of each of the next seven years.c. $80,000 paid in one lump sum 7 years from now.Question 9You are negotiating for the terms of a legal settlement, and your opponent?s attorney haspresented you with the following alternative settlement alternatives:a. $38,000 today in one lump sum.b. $50,000 to be paid to you in five equal payments of $10,000 at the end of each of thenext five years.c. Five equal annual installments of $9,100 each, beginning today.If your discount rate is 10%, what is the present value of each of the alternatives andwhich alternative would you choose, and why?Question 10Oleans, Inc. projects sales to be $100,000, $90,000, $95,000 during the months ofAugust, September, and October respectively. Salaries are projected to be $12,000 plus5% of sales. Purchases are 50% of sales for the month and paid in the month of purchase.A tax payment of $60,000 and an equipment purchase of $20,000 will be made inSeptember. Transactions are for cash, and a ($20,000) cash balance starts the monthof August. The firm maintains a minimum target end of month balance of $6,000. Thereis no limit as to how high the cash balance can be.Calculate the ending cash balance after any deficit is financed to achieve the target levelfor each of the three months.Question 11Following is the balance sheet for the end of the year 2013 for Silver Spurs, Inc.:2013 2014Current Assets $15,000 Net Fixed Assets 20,000Total Assets $35,000Accounts Payable $ 2,000Notes Payable 1,000Long-Term Debt 10,000Common Equity 22,000Total Liabilities/Equity $35,000They have generated sales for 2013 of $35,000 resulting in net income of $15,000. Due to the difficulty associated with acquiring raw materials, Silver Spurs has experienced sluggish business that has caused fixed assets to be underutilized. Management thinks it can double sales in 2014 through the introduction of a new product. No new fixed assets will be required and the dividend payout ratio will be 100%. Assume no additional deprecation expense will be taken in 2014. Project next year?s balance sheet in the space provided above to determine the additional funding needed (AFN) for this new product. Assume notes payable at the end of 2013 are paid off in 2014.Question # 12: What is the value of a ten-year $1,000 par-value bond with a 8% annual coupon rate and the market rate of interest is 10%?Question 13. Indicate which of the following bonds seems to be reported incorrectly with respect to discount, premium, or par and explain why.Bond Price Coupon Rate Yield to MaturityA 105 9% 8%B 100 6% 6%C 101 5% 4.5%D 102 0% 5%


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