Question: LO 2 2. Building an Income Statement. Pharrell, Inc., has sales of $634,000, costs of $328,000, depreciation expense of $73,000, interest expense of $38,000, and

LO 2 2. Building an Income Statement. Pharrell, Inc., has sales of $634,000, costs of $328,000, depreciation expense of $73,000, interest expense of

LO 2 2. Building an Income Statement. Pharrell, Inc., has sales of $634,000, costs of $328,000, depreciation expense of $73,000, interest expense of $38,000, and a tax rate of 35 percent. What is the net income for this firm? 7 PART 2 Understanding Financial Statements and Cash Flow LO2 3. Dividends and Retained Earnings. Suppose the firm in Problem 2 paid out $43,000 in cash dividends. What is the addition to retained earnings? X LO 4 9. Calculating Additions to NWC. The December 31, 2015, balance sheet of Maria's Tennis Shop, Inc., showed current assets of $1,530 and current liabilities of $1,270. The December 31, 2016, balance sheet showed current assets of $1,685 and current liabilities of $1,305. What was the company's 2016 change in net working capital, or NWC? 10. Cash Flow to Creditors. The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,410,000, and the December 31, 2016, balance sheet showed long-term debt of $1,551,000. The 2016 income statement showed an interest expense of $ 102,800. What was the firm's cash flow to creditors during 2016? LO 4

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