Consider the following abbreviated financial statements for parrothead enterprises: parrothead enterprises parrothead enterprises 2014 and 2015 partial balance sheets 2015 income statement assets liabilities & owners’ equity sales 12,991 2015 2014 2015 2014 costs 5,843 current assets 931 946 current liabilities 375 493 depreciation 1,034 net fixed assets 3,712 4,297 long-term debt 2,099 2,126 interest 146 if the tax rate is 32 percent, what is the cash flow from assets for the year?

The cash flow from assets for the year is $3,522

Explanation:

Computation of the cash flow from assets for 2019 is shown below:

= Operating cash flow - net capital spending - changes in working capital

where,

Operating cash flow = EBIT + depreciation - income tax expense

The EBIT = Sales - cost - depreciation expense

               = $12,991 - $5,843 - $1,034

               = $6,114

And, the income tax expense = (EBIT - Interest) × tax rate

                                                 = ($6,114 - $146) × 32%

                                                 = $1,909.76

So, the operating cash flow =  $6,114 + $1,034 -  $1,909.76

                                              = $5,238.24

Net capital capital = ending fixed assets - beginning fixed assets + depreciation

= $4,297  - $3,712 + $1,034

= $1,619

Changes in working capital = (ending balance of current assets - ending balance of current liabilities) - (beginning balance of current assets - beginning balance of current liabilities)

= ($946 - $493)  - ($931 - $375)  

=  $453 - $356

= $97

Now put these values to the above formula  

So, the value would equal to

= $5,238.24 - $1,619 - $97

= $3,522

a. money supply  

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