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Balance Sheet and Rate

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• Published : March 3, 2015

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﻿1．A firm has net working capital of \$640. Long-term debt is \$4,180, total assets are e \$6,230, and fixed assets are \$3,910. What is the amount of the total liabilities? Current assets: 6230-3910=2320

Current liabilities: 6230-39102320-640=1680
Total liabilities: 1680+4180=5860
2. Kaylor Equipment Rental paid \$75 in dividends and \$511 in interest expense. The addition to retained earnings is \$418 and net new equity is \$500. The tax rate is 35 percent. Sales are \$15,900 and depreciation is \$680. What are the earnings before interest and taxes? Net Income: 75+418=493

75+418493/ (1-0.35) =758
Earnings before interest and taxes= 758.46+511= 1269
3. Winston Industries had sales of \$843,800 and costs of \$609,900. The firm paid \$38,200 in interest and \$18,000 in dividends. It also increased retained earnings by \$62,138 for the year. The depreciation was \$76,400. What is the average tax rate? Net Income: 18000+62138= 80138

Earnings before taxes: 843800-609900-38200-76400= 119300
Tax rate: (119300-80138) /119300= 0.3283
4. Beach Front Industries has sales of \$546,000, costs of \$295,000, depreciation expense of \$37,000, interest expense of \$15,000, and a tax rate of 32 percent. The firm paid \$59,000 in cash dividends. What is the addition to retained earnings? Earnings before tax: 546000-295000-37000-15000= 199000

After tax: 199000*(1-0.32) = 135320
Retained earnings: 135320-59000= 76320
5. Dee Dee's Marina is obligated to pay its creditors \$6,400 today. The firm's assets have a current market value of \$5,900. What is the current market value of the shareholders' equity? Equity=5900-6400= -500

6. Which one of the following will produce the highest present value interest factor? A. 6 percent interest for five years
B. 6 percent interest for eight years
C. 6 percent interest for ten years
D. 8 percent interest for five years
E. 8 percent interest for ten years
PV=FV/ (1+Rate)t, so the answer is A.
7. You invested \$1,400 in an account...