Cash Flows and Financial Statements at Sunset Boards, Inc.Sunset Boards is a small company that manufactures and sellssurfboards in Malibu. Tad Marks, the founder of the company,is in charge of the design and sale of the surfboards, but hisbackground is in surfing, not business. As a result, the compa-Sunset Boards currently pays out 50 percent of neincome as dividends to Tad and the other original investorsand has a 20 percent tax rate. You are Christina's assistant, andshe has asked you to prepare the following:ny's financial records are not well maintained.1.The initial investment in Sunset Boards was provided byAn income statement for 2008 and 2009.Tad and his friends and family. Because the initial investment2.A balance sheet for 2008 and 2009.was relatively small, and the company has made surfboards3.only for its own store, the investors haven't required detailed4.financial statements from Tad. But thanks to word of mouthOperating cash flow for each year.Cash flow from assets for 2009.5. Cash flow to creditors for 2009.among professional surfers, sales have picked up recently, andTad is considering a major expansion. His plans include open-ing another surfboard store in Hawaii, as well as supplying his"sticks" (surfer lingo for boards) to other sellers.Tad's expansion plans require a significant investment,which he plans to finance with a combination of additionalfunds from outsiders plus some money borrowed from banks.Naturally, the new investors and creditors require more orga-nized and detailed financial statements than Tad has previ-6.Cash flow to stockholders for 2009.QUESTIONSHow would you describe Sunset Boards' cash flows for2009? Write a brief discussion.1.In light of your discussion in the previous question,what do you think about Tad's expansion plans?2.ously prepared. At the urging of his investors, Tad has hiredfinancial analyst Christina Wolfe to evaluate the performanceof the company over the past year.After rooting through old bank statements, sales receipts,tax returns, and other records, Christina has assembled the fol-lowing information:20082009$126,03818,187Cost of goods sold$159,143Cash27,478Depreciation35,58140,217 nized and detailed financial statements than Tad has previ-your iscEwhat do you think abously prepared. At the urging of his investors, Tad has hiredfinancial analyst Christina Wolfe to evaluate the performanceof the company over the past year.After rooting through old bank statements, sales receipts,tax returns, and other records, Christina has assembled the fol-lowing information:20082009Cost of goods sold$126,03818,18735,5817,735$159,143Cash27,478DepreciationInterest expense40,2178,86632,35236,404191,250301,39216,71715,99791,19537,21615,600Selling and administrativeAccounts payable24,78732,143156,975247,25912,88714,65179,235Net fixed assetsSalesAccounts receivableNotes payableLong-term debtInventoryNew equity27,119

Name: Cash Flows and Financial Statements at Sunset Boards, Inc.Sunset Boar
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Description: Cash Flows and Financial Statements at Sunset Boards, Inc.Sunset Boards is a small company that manufactures and sellssurfboards in Malibu. Tad Marks, the founder of the company,is in charge of the design and sale of the surfboards, but hisbackgroun

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After rooting through old bank statements, sales receipts, tax returns, and other records, Christina has assembled the fol- lowing information: 2008 2009 Cost of goods sold $126,038 $159,143 Cash 18,187 27,478 Depreciation 35,581 40,217 Interest expense 7,735 8,866 Selling and administrative Accounts payable 24,787 32,352 32,143 36,404 Net fixed assets 156,975 191,250 Sales 247,259 301,392 Accounts receivable 12,887 16,717 Notes payable Long-term debt 14,651 15,997 79,235 91,195 27,119 37,216 Inventory New equity 15,600

After rooting through old bank statements, sales receipts, tax returns, and other records, Christina has assembled the fol- lowing information: 2008 2009 Cost of goods sold $126,038 $159,143 Cash 18,187 27,478 Depreciation 35,581 40,217 Interest expense 7,735 8,866 Selling and administrative Accounts payable 24,787 32,352 32,143 36,404 Net fixed assets 156,975 191,250 Sales 247,259 301,392 Accounts receivable 12,887 16,717 Notes payable Long-term debt 14,651 15,997 79,235 91,195 27,119 37,216 Inventory New equity 15,600

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 1RP

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