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)
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 shareholdersâ€™ 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 Seaâ€™sgross investment in fixed assets during 2016?(Enter your answer in millions.)

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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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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