The below tables shows Dynamic Mattress’s year-end 2016 and 2018 balance sheets, and its income statement for 2017. Dynamic Mattress Year-End Balance Sheet for 2016 (figures in $ millions) Assets Liabilities and Shareholders’ Equity Current Assets: Current Liabilities: Cash $ 22 Bank loans $ 22 Marketable securities 11 Accounts payable 80 Accounts receivable 111 Inventory 155 Total current assets $ 299 Total current liabilities $ 102 Fixed assets: Gross investment $ 251 Long-term debt 26 Less depreciation 71 Net worth (equity and retained earnings) 351 Net fixed assets $ 180 Total assets $ 479 Total liabilities and net worth $ 479 Dynamic Mattress Year-End Balance Sheet for 2017 (figures in $ millions) Assets Liabilities and Shareholders’ Equity Current Assets: Current Liabilities: Cash $ 32.0 Debt due within a year (bank loans) $ 28.0 Marketable securities 0.0 Accounts payable 116.0 Accounts receivable 126.0 Inventory 189.0 Total current assets $ 347.0 Total current liabilities $ 144.0 Fixed assets: Gross investment $ 347.0 Long-term debt 62.0 Less depreciation 77.5 Net worth (equity and retained earnings) 410.5 Net fixed assets $ 269.5 Total assets $ 616.5 Total liabilities and owners’ equity $ 616.5 Dynamic Mattress Income Statement for 2017 (figures in $ millions) Sales $ 1,501.0 Operating costs 1,409.5 $ 91.5 Depreciation 7.5 EBIT $ 84.0 Interest 6.0 Pretax income $ 78.0 Tax at 50% 39.0 Net income $ 39.0 Notes: Dividend = $35 million and reinvested earnings = $15 million. Use the tables above to work out the statement of cash flows for 2017. (Enter your answers in millions of dollars rounded to 1 decimal place.)

The below tables shows Dynamic Mattress’s year-end 2016 and 2018 balance sheets, and its income statement for 2017. Dynamic Mattress Year-End Balance Sheet for 2016 (figures in $ millions) Assets Liabilities and Shareholders’ Equity Current Assets: Current Liabilities: Cash $ 22 Bank loans $ 22 Marketable securities 11 Accounts payable 80 Accounts receivable 111 Inventory 155 Total current assets $ 299 Total current liabilities $ 102 Fixed assets: Gross investment $ 251 Long-term debt 26 Less depreciation 71 Net worth (equity and retained earnings) 351 Net fixed assets $ 180 Total assets $ 479 Total liabilities and net worth $ 479 Dynamic Mattress Year-End Balance Sheet for 2017 (figures in $ millions) Assets Liabilities and Shareholders’ Equity Current Assets: Current Liabilities: Cash $ 32.0 Debt due within a year (bank loans) $ 28.0 Marketable securities 0.0 Accounts payable 116.0 Accounts receivable 126.0 Inventory 189.0 Total current assets $ 347.0 Total current liabilities $ 144.0 Fixed assets: Gross investment $ 347.0 Long-term debt 62.0 Less depreciation 77.5 Net worth (equity and retained earnings) 410.5 Net fixed assets $ 269.5 Total assets $ 616.5 Total liabilities and owners’ equity $ 616.5 Dynamic Mattress Income Statement for 2017 (figures in $ millions) Sales $ 1,501.0 Operating costs 1,409.5 $ 91.5 Depreciation 7.5 EBIT $ 84.0 Interest 6.0 Pretax income $ 78.0 Tax at 50% 39.0 Net income $ 39.0 Notes: Dividend = $35 million and reinvested earnings = $15 million. Use the tables above to work out the statement of cash flows for 2017. (Enter your answers in millions of dollars rounded to 1 decimal place.)

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter13: Financial Statement Analysis

Section: Chapter Questions

Problem 13.6E

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Question

The below tables shows Dynamic Mattress’s year-end 2016 and 2018 balance sheets, and its income statement for 2017.

Dynamic Mattress Year-End Balance Sheet for 2016 (figures in $ millions)
Assets			Liabilities and Shareholders’ Equity
Current Assets:			Current Liabilities:
Cash	$	22	Bank loans	$	22
Marketable securities		11	Accounts payable		80
Accounts receivable		111
Inventory		155
Total current assets	$	299	Total current liabilities	$	102

Fixed assets:
Gross investment	$	251	Long-term debt		26
Less depreciation		71	Net worth (equity and retained earnings)		351
Net fixed assets	$	180
Total assets	$	479	Total liabilities and net worth	$	479

Dynamic Mattress Year-End Balance Sheet for 2017 (figures in $ millions)
Assets			Liabilities and Shareholders’ Equity
Current Assets:			Current Liabilities:
Cash	$	32.0	Debt due within a year (bank loans)	$	28.0
Marketable securities		0.0	Accounts payable		116.0
Accounts receivable		126.0
Inventory		189.0
Total current assets	$	347.0	Total current liabilities	$	144.0

Fixed assets:
Gross investment	$	347.0	Long-term debt		62.0
Less depreciation		77.5	Net worth (equity and retained earnings)		410.5
Net fixed assets	$	269.5
Total assets	$	616.5	Total liabilities and owners’ equity	$	616.5

Dynamic Mattress Income Statement for 2017 (figures in $ millions)
Sales	$	1,501.0
Operating costs		1,409.5
	$	91.5
Depreciation		7.5
EBIT	$	84.0
Interest		6.0
Pretax income	$	78.0
Tax at 50%		39.0
Net income	$	39.0

Notes: Dividend = $35 million and reinvested earnings = $15 million.

Use the tables above to work out the statement of cash flows for 2017. (Enter your answers in millions of dollars rounded to 1 decimal place.)

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