South Sea Baubles has the following (incomplete) balance sheet and income statement. BALANCE SHEET AT END...

Transcribed Image Text:

South Sea Baubles has the following (incomplete) balance sheet and income statement. BALANCE SHEET AT END OF YEAR (Figures in 5 millions) 2022 Liabilities and Shareholders' Equity $ 240 Current liabilities 1.100 Long-tern debt Assets Current assets Net fixed assets 2021 $ 110 1.000 INCOME STATEMENT, 2022 (Figures in 5 millions) Revenue Cost of goods sold Depreciation Interest expense 2021 $ 90 700 2022 $ 120 950 $ 2.050 1,130 450 260 a&b. What is shareholders' equity in 2021 and 2022? c&d. What is net working capital in 2021 and 2022? e. What are taxes paid in 2022? Assume the firm pays taxes equal to 21% of taxable income. f. What is cash provided by operations during 2022? g. Net fixed assets increased from $1,000 million to $1,100 million during 2022. What must have been South Sea's gross investment in fixed assets during 2022? h. If South Sea reduced its outstanding accounts payable by $55 million during the year, what must have happened to its other current liabilities? South Sea Baubles has the following (incomplete) balance sheet and income statement. BALANCE SHEET AT END OF YEAR (Figures in 5 millions) 2022 Liabilities and Shareholders' Equity $ 240 Current liabilities 1.100 Long-tern debt Assets Current assets Net fixed assets 2021 $ 110 1.000 INCOME STATEMENT, 2022 (Figures in 5 millions) Revenue Cost of goods sold Depreciation Interest expense 2021 $ 90 700 2022 $ 120 950 $ 2.050 1,130 450 260 a&b. What is shareholders' equity in 2021 and 2022? c&d. What is net working capital in 2021 and 2022? e. What are taxes paid in 2022? Assume the firm pays taxes equal to 21% of taxable income. f. What is cash provided by operations during 2022? g. Net fixed assets increased from $1,000 million to $1,100 million during 2022. What must have been South Sea's gross investment in fixed assets during 2022? h. If South Sea reduced its outstanding accounts payable by $55 million during the year, what must have happened to its other current liabilities?

Answer rating: 100% (QA)

South Sea Baubles Question a b Calculation of Shareholders Equity Shareholders equity can be calculated by taking the difference of All assets and all ... View the full answer