Question

Manaia Manufacturing had the following operating results for 2022: sales =$30,124; cost of goods sold =$21,722; depreciation expense =$3,505; interest expense =$539; dividends paid =$845. At the beginning of the year, net fixed assets were $20,017, current assets were $3,117, and current liabilities were $3,665. At the end of the year, net fixed assets were $23,062, current assets were $4,436, and current liabilities were $3,061. The tax rate for 2022 was 25 percent. a. What is net income for 2022? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32 . b. What is the operating cash flow for 2022 ? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32 . c. What is the cash flow from assets for 2022? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. d. If no new debt was issued during the year, what is the cash flow to creditors for 2022? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. e. Assume no new debt was issued during the year. What is the cash flow to stockholders for 2022? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32 .

Answer 1

Net income for Manaia Manufacturing in 2022 is calculated as sales - cost of goods sold - depreciation - interest expense - taxes, resulting in $3,267.25. The operating cash flow is the net income plus depreciation, which sums up to $6,772.25. Cash flow from assets factors in operating cash flow minus changes in net working capital and net fixed assets, resulting in $2,362.25. Cash flow to creditors is simply the interest expense of $539, and cash flow to stockholders is the negative of dividends paid, -$845.

Step-by-step explanation:

To answer the student's question, we'll need to perform several financial calculations based on the given data. Firstly, let's calculate the net income for 2022.

Net Income = Sales - Cost of Goods Sold - Depreciation - Interest Expense - Taxes

Taxes = (Sales - Cost of Goods Sold - Depreciation - Interest Expense) * Tax Rate

Taxes = ($30,124 - $21,722 - $3,505 - $539) * 25% = $1,089.75

Net Income = $30,124 - $21,722 - $3,505 - $539 - $1,089.75 = $3,267.25

Next, to compute the operating cash flow for 2022, we'll add the depreciation back to the net income since it's a non-cash expense.

Operating Cash Flow = Net Income + Depreciation Expense = $3,267.25 + $3,505 = $6,772.25

For the cash flow from assets for 2022, we need to consider the changes in net working capital and changes in net fixed assets in addition to operating cash flow.

Net Working Capital Change = (End Current Assets - End Current Liabilities) - (Start Current Assets - Start Current Liabilities)

Net Working Capital Change = ($4,436 - $3,061) - ($3,117 - $3,665) = $1,365

Change in Net Fixed Assets = Ending Net Fixed Assets - Beginning Net Fixed Assets = $23,062 - $20,017 = $3,045

Cash Flow from Assets = Operating Cash Flow - Net Working Capital Change - Change in Net Fixed Assets = $6,772.25 - $1,365 - $3,045 = $2,362.25

The cash flow to creditors for 2022 and cash flow to stockholders are calculated by considering the interest expense and dividends.

Cash Flow to Creditors = Interest Expense = $539

Cash Flow to Stockholders = Dividends Paid = -$845

Please remember to round these calculated values to the nearest whole number when necessary.

Answer 2

The net income for 2022 is $2,123. The operating cash flow for 2022 is $5,628. The cash flow from assets for 2022 is $1,131.

Step-by-step explanation:

To find the net income for 2022, we need to calculate the operating income, which is calculated by subtracting the cost of goods sold, depreciation expense, and interest expense from the sales. So, the operating income for 2022 = $30,124 - $21,722 - $3,505 - $539 = $4,358.

To calculate the net income, we need to subtract the taxes and dividends paid from the operating income. The tax rate for 2022 is 25%. So, the net income for 2022 = $4,358 * (1 - 0.25) - $845 = $2,968 - $845 = $2,123.

The operating cash flow for 2022 can be calculated by adding the depreciation expense to the net income. So, the operating cash flow for 2022 = $2,123 + $3,505 = $5,628.

The cash flow from assets for 2022 can be calculated by subtracting the change in net fixed assets and the change in working capital (current assets - current liabilities) from the operating cash flow. So, the cash flow from assets for 2022 = $5,628 - ($23,062 - $20,017) - ($4,436 - $3,117 - $3,061) = $5,628 - $3,045 - $1,452 = $1,131.

Since no new debt was issued during the year, the cash flow to creditors for 2022 would be zero.

If no new debt was issued during the year, the cash flow to stockholders for 2022 can be calculated by subtracting the cash flow from assets from the operating cash flow. So, the cash flow to stockholders for 2022 = $5,628 - $1,131 = $4,497.