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Problem: A.E. Neuman Corporation Statement of Cash Flows for Year Ended December 31, 2010

Given the financial information for the A.E. Neumann Corporation please provide answer the following problems.

A: Make a Statement of Cash Flows for year ended December 31, 2010.
B: What is dividend payout ratio for 2010?
C: If we raised the dividend payout ratio to 100%, what would occur to retained earnings at year end 2010?

Assets                                                 2009                                             2010

Cash                                                  45,000                                           50,000
Marketable Securities                           175,000                                         160,000
Accounts Receivable                            140,000                                         110,000
Inventories                                         230,000                                         350,000
Investments                                       170,000                                           55,000
Plant & Equipment                             1,500,000                                       1,750,000
Less Accum Deprec                            -450,000                                         -600,000
Net Plant & Equipment                          850,000                                          950,000
Total Assets                                    1,810,000                                        1,900,000

Liabilities & Stockholders’ Equity                       2009                                     2010

Accounts Payable                                        110,000                                  85,000
Notes Payable                                             150,000                                 140,000
Accrued Expense                                           80,000                                  35,000
Income Tax Payable                                       10,000                                  15,000
Bonds Payable                                             860,000                                955,000
Common Stock (100,000 shares $1 par)            100,000                               100,000
Capital Pain in Excess Par                               100,000                               100,000
Retained Earnings                                          400,000                               470,000
Total Liabilities & Stockholders’ Equity             1,810,000                            1,900,000

Sales                                                                                 7,000,000
Less Cost of Goods Sold                                                        4,200,000
Gross Profit                                                                         2,800,000
Less Selling & Administrative Expense                                         260,000
Operating Profit                                                                   2,540,000
Less depreciation Expense                                                       150,000
Earnings before Interest & Taxes                                            2,390,000
Less Interest Expense                                                             160,000
Earnings before Taxes                                                          2,230,000
Less Taxes (50%)                                                               1,150,000
Net Income                                                                       1,150,000
Dividends Paid                                                                    1,045,000

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M93802

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