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) |
| Assets | 2015 | 2016 | Liabilities and Shareholders' Equity | 2015 | 2016 |
| Current assets | $ | 100 | | $ | 190 | | Current liabilities | $ | 70 | | $ | 90 | |
| Net fixed assets | | 900 | | | 1,000 | | Long-term debt | | 650 | | | 850 | |
|
| INCOME STATEMENT, 2016 |
| (Figures in $ millions) |
| Revenue | $ | 2,000 | |
| Cost of goods sold | | 1,080 | |
| Depreciation | | 400 | |
| Interest expense | | 250 | |
|
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.)
