You Are Given The Following Information About Clarkesville P
You Are Given The Following Information About Clarkesville Plumbing
Calculate its net income by setting up an income statement using the provided financial data. The information includes revenues, depreciation expenses, costs of goods sold, interest expenses, current assets, current liabilities, and the tax rate.
Next, set up an income statement for the Oakland Mills Company using its sales, cost of goods sold, depreciation expenses, interest expenses, and tax rate to find its net income.
Determine the net cash used in investing activities for Towson Recording Company based on its investment in marketable securities, fixed asset acquisitions, and maturities of securities.
Calculate the net cash provided by financing activities for Caustic Chemicals considering its debt repayment, new debt raised, and stock repurchases.
Find out how much long-term debt Blackwell Automotive has, given its various assets, liabilities, and equity components.
Compute the net income after taxes for Nimitz Rental Company using its revenues, expenses, and tax rate.
Paper For Above instruction
Financial Analysis and Net Income Calculation for Clarkesville Plumbing
The process of calculating a company's net income involves constructing an income statement based on its financial data. For Clarkesville Plumbing, the key figures include revenues of $896, depreciation expenses of $75, costs of goods sold of $365, interest expenses of $54, current assets of $121, current liabilities of $107, and a tax rate of 34%.
First, compute the gross profit by subtracting the cost of goods sold from revenues:
Gross Profit = Revenues - Cost of Goods Sold = $896 - $365 = $531
Next, subtract operating expenses, which include depreciation, to find EBIT (Earnings Before Interest and Taxes):
EBIT = Gross Profit - Depreciation = $531 - $75 = $456
Then, deduct interest expenses to get taxable income:
Taxable Income = EBIT - Interest Expenses = $456 - $54 = $402
Calculate taxes:
Taxes = Taxable Income Tax Rate = $402 0.34 = $136.68
Calculate net income:
Net Income = Taxable Income - Taxes = $402 - $136.68 ≈ $265.32
Thus, Clarkesville Plumbing’s net income is approximately $265.32. This figure can be used for further financial analysis or reporting purposes.
Net Income Calculation for Oakland Mills Company
Using the provided data: sales of $1.45 million, COGS of $812,500, depreciation of $175,000, interest expenses of $89,575, and a tax rate of 35%, the income statement is constructed as follows:
Revenue: $1,450,000
Cost of Goods Sold: $812,500
Gross Profit = Revenue - COGS = $1,450,000 - $812,500 = $637,500
Subtract operating expenses (depreciation):
EBIT = Gross Profit - Depreciation = $637,500 - $175,000 = $462,500
Subtract interest expenses to find taxable income:
Taxable Income = EBIT - Interest Expenses = $462,500 - $89,575 = $372,925
Calculate taxes:
Taxes = Taxable Income Tax Rate = $372,925 0.35 ≈ $130,526
Net Income = Taxable Income - Taxes:
Net Income ≈ $372,925 - $130,526 ≈ $242,399
The Oakland Mills Company earned approximately $242,399 in net income for the year.
Investing Activities for Towson Recording Company
During 2011, Towson Recording Company increased investments in marketable securities by $36,845, funded fixed asset acquisitions of $109,455, and had $14,215 in securities mature. To find the net cash used in investing activities, consider the cash outflows for acquisitions and the cash inflows from maturing securities:
Cash outflows: Fixed asset purchases = $109,455
Cash inflows: Maturities of marketable securities = $14,215
Net cash used in investing activities = Outflows - Inflows = $109,455 - $14,215 = $95,240
The net cash used in investing activities amounts to $95,240, reflecting the company's investment in growth assets during the year.
Financing Activities of Caustic Chemicals
Caustic Chemicals repaid debt of $312,080, raised additional debt of $650,000, and repurchased stock worth $45,250. To determine net cash provided by financing activities:
Cash inflows: New debt raised = $650,000
Cash outflows: Debt repayment and stock repurchase:
Debt repayment = $312,080
Stock repurchase = $45,250
Net cash provided by financing activities = Inflows - Outflows = $650,000 - ($312,080 + $45,250) = $650,000 - $357,330 = $292,670
Therefore, Caustic Chemicals had a net cash inflow of $292,670 from financing activities, indicating increased leverage and shareholder value through debt financing and stock repurchases.
Long-term Debt of Blackwell Automotive
Given the comprehensive balance sheet data—from assets including net plant and equipment to liabilities and equity—long-term debt can be calculated by examining the company's total liabilities and equity structure. The key components are:
- Cash: $23,015
- Accounts payable: $163,257
- Accounts receivable: $141,258
- Inventory: $212,444
- Other current assets: $11,223
- Net plant and equipment: $711,256
- Goodwill and other assets: $78,656
- Common stock: $313,299
- Retained earnings: $512,159
- Short-term notes payable: $21,115
Total assets = Sum of all assets = cash + accounts receivable + inventory + other current assets + net plant + goodwill/other assets. Total liabilities include accounts payable, short-term notes payable, and long-term debt (unknown). Using accounting identities, the total assets equal total liabilities plus equity. Calculating total assets and subtracting known liabilities and equity allows determination of long-term debt.
Total assets ≈ $23,015 + $141,258 + $212,444 + $11,223 + $711,256 + $78,656 = approximately $1,177,852
Total liabilities include current liabilities ($163,257 + $21,115) = $184,372. Equity is the sum of common stock and retained earnings: $313,299 + $512,159 = $825,458. The balance sheet equation states:
Total assets = Total liabilities + Equity. Therefore, long-term debt = Total assets - current liabilities - equity = $1,177,852 - $184,372 - $825,458 ≈ $168,022
Thus, Blackwell Automotive's long-term debt is approximately $168,022, reflecting its capital structure and debt level.
Net Income of Nimitz Rental Company
Nimitz Rental provided revenues of $878,412, expenses including general and administrative expenses ($352,666), depreciation ($131,455), leasing expenses ($108,195), and interest expenses ($78,122). The tax rate is 34%. To compute net income:
First, calculate Earnings Before Tax (EBT):
EBT = Revenue - Expenses (excluding tax):
EBT = $878,412 - ($352,666 + $131,455 + $108,195 + $78,122) = $878,412 - $670,438 = $207,974
Calculate taxes:
Taxes = EBT Tax rate = $207,974 0.34 ≈ $70,674
Finally, determine net income after taxes:
Net Income = EBT - Taxes = $207,974 - $70,674 ≈ $137,300
Nimitz Rental's net income after taxes is approximately $137,300, indicating the profitability after accounting for all expenses and taxes.
Conclusion
This comprehensive analysis demonstrates how detailed financial data can be utilized to prepare income statements, evaluate investment activities, and assess financial structure. Accurate calculations are essential for internal decision-making, investor confidence, and compliance with financial reporting standards. The ability to interpret various financial metrics enables stakeholders to make informed decisions aligned with company performance and market conditions.
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