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Problem 3-6 Financial Statements (LO1,4) South Sea Baubles has the following (incomplete) balance sheet and income statement. BALANCE...

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Finance

Problem 3-6 Financial Statements (LO1,4)

South Sea Baubles has the following (incomplete) balance sheetand income statement.

BALANCE SHEET AT END OF YEAR
(Figures in $ millions)
Assets20152016Liabilities and Shareholders' Equity20152016
Current assets$100$190Current liabilities$70$90
Net fixed assets9001,000Long-term debt650850
INCOME STATEMENT, 2016
(Figures in $ millions)
Revenue$2,000
Cost of goods sold1,080
Depreciation400
Interest expense250

a&b. What is shareholders’ equity in 2015and 2016? (Enter your answers in millions.)

c&d. What is net working capital in 2015and 2016? (Enter your answers in millions.)

e. What are taxes paid in 2016? Assume the firmpays taxes equal to 35% of taxable income. (Do not roundintermediate calculations. Enter your answer in millions rounded to2 decimal places.)

f. What is cash provided by operations during2016? (Do not round intermediate calculations. Enter youranswer in millions rounded to 2 decimal places.)

g. Net fixed assets increased from $900 millionto $1,000 million during 2016. What must have been South Sea’sgross investment in fixed assets during 2016?(Enter your answer in millions.)

Answer & Explanation Solved by verified expert
3.6 Ratings (548 Votes)
ab Ownersequity Total assets Total liabilities Shareholders Equity2015 100 900 70 650 1000 720 280 millions Shareholders Equity2015 190 1000 90 850 1190 940 250 million    See Answer
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