Assignment 1
1. Tax Calculation
The firm C has taxable income 76000.
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Taxable Income
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Tax Rate
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0
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50000
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0.15
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50001
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75000
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0.25
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75001
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100000
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0.34
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100001
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335000
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0.39
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335001
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10000000
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0.34
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(1) Based on tax table above, please find marginal tax rate for firm
(2) According to tax table above, please calculate total tax of firm C and average tax rate for Firm c. (3 credits)
2. Balance sheet
The following statement is the balance sheet of firm A.
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Balance Sheet of Firm A(units: million)
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Current Asset:
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Current Liabilities:
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Cash and Equivalents
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100
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Accounts payable
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|
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Accounts Receivable
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Total Current Liabilities
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186
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Inventory
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78
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Total Current Assets
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Long Term Liabilities:
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Deferred Taxes
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|
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Fixed Assets:
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Long Term debt
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137
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Property,Plant,and equipment
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Total Long Term Liability
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157
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Less Accumulated Depreciation
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420
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Net Property,plant,and Equipment
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Stockholders' Equity:
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Preferred Stock
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39
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Intangible Assests and Others
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244
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Common Stock
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55
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Total Fixed Assets
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502
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Capital Surplus
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147
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Accumulated Retained Earnings
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190
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Total Assets
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Less Treasury Stock
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26
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Total Equity
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405
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Total Liabilities and Equity
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(1) According accounting rules and accounting equation to fill red box .
(2) If firm A sells products whose value is 10 million and the value is not paid in cash. The firm A will get cash in the future. In this case, which item in the balance sheet will increase and which item in the balance sheet will decrease?
3. Financial Cash flow and statement of cash flows
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Statement of Cash flows(units:million)
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Operation
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Net income
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192
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Depreciation
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76
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Deferred Taxes
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13
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Change in Assets and liabilities
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|
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You are researching Time Manufacturing and have found the following accounting statement of cash flows for the most recent year. You also know that the company paid $84 million in current taxes and had an interest expense of $41 million.
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Acccounts receivable
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-16
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Inventories
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17
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Accounts payable
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13
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Accrued Expenses
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-7
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Other
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2
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Total cash flow from operation
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290
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Investing activities
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|
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Acquisition of fixed assets
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-198
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Sale of fixed assets
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21
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Total cash flow from investing activities
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-177
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Financing Activities
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Retirement of long-term debt
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-150
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proceeds from long-term debt sales
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115
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change in notes payable
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8
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Dividends
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-81
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Repurchase of stock
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-11
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Proceeds from long-term debt sales
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43
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Total cash flow from financing activities
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-76
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change in cash(balance sheet)
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37
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(1) Use information above :interest expenses, current tax and statement of cash flow to compute financial cash flow.
(hint: please first calculate cash flows from three parts and then sum them)
(2) Based on Statement of cash flow, please calculate the cash flow for shareholders and cash flow for debtholders. Based on Calculation, write down the equation about Cash flow for different stakeholders.