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Consider the following abbreviated financial statements for a company ...

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Finance

Consider the following abbreviated financial statements for a company

ASSETS

LIABILITIES and OWNERS EQUITY

2019

2020

2019

2020

Current Assets

$1,000

$1,200

Current Liabilities

$500

$700

Net Fixed Assets

$5,000

$5,500

Long-term Debt

$2,500

$2,800

2020 INCOME STATEMENT

Sales

$30,000

Costs of Goods Sold

$20,000

Depreciation

$5,000

Interest Expense

$1,000

(a) (4 points) What is owners equity for 2019 and 2020?

(b) (4 points) During 2020, Kirksville Inc. has paid off $400 of long-term debt. How much must Kirksville Inc. have raised in new long-term debt the year?

(c) (7 points) During 2020, Kirksville Inc. paid out $2,200 in cash dividends, what is the cash flow to stockholders? Assume that the applicable marginal tax rate is 20%.

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