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The input information required for the problem is outlined in the "Key Input Data" section below. Using this data and the balance sheet above, we constructed the income statement shown below.
Key Input Data for Vanguard Pharmaceuticals				2016
(Thousands of dollars)
Sales Revenue				$682,500
Expenses (excluding depreciation) as a percent of sales				76.5%
Net fixed assets				$100,500
Depr. as a % of net fixed assets				9.0%
Tax rate				36.0%
Interest expense				$12,825
Dividend Payout Ratio				22.5%
Vanguard Pharmaceuticals: Income Statement (Thousands of dollars)				2016
Sales				$682,500
Operating costs excluding depreciation				$522,113
EBITDA				$160,388
Depreciation (Vanguard has no amortization charges)				$9,045
EBIT				$151,343
Interest expense				$12,825
EBT				$138,518
Taxes				$49,866
Net income				$88,651
Common dividends				$19,947
Addition to retained earnings				$68,705
B. Vanduard Pharmaceuticals' partial balance sheets are shown below. Vanguard issued $10,000,000 of new common stock in the most recent year. Using this information and the results from part a, fill in the missing values for common stock, retained earnings, total common equity, and total liabilities and equity.
							Dollar value of common stock issued (in thousands of dollars)				$10,000
Vanguard Industries December 31 Balance Sheets
(in thousands of dollars)
				2016	2015
Assets
Cash and cash equivalents				$102,805	$74,625
Short-term investments				11,400	15,100
Accounts Receivable				108,470	85,527
Inventories				38,450	34,982
Total current assets				$261,125	$210,234
Net fixed assets				100,500	42,436
Total assets				$361,625	$252,670
Liabilities and equity
Accounts payable				$30,761	$23,109
Accruals				30,405	22,656
Notes payable				12,717	14,217
Total current liabilities				$73,883	$59,982
Long-term debt				80,263	63,914
Total liabilities				$154,146	$123,896
Common stock				$361,625	$90,000
Retained earnings				207,479	38,774
Total common equity				$100,000	$128,774
Total liabilities and equity				$107,479	$252,670
Check for balancing (this should be zero):
C. Construct the statement of cash flows for the most recent year.
Statement of Cash Flows
(in thousands of dollars)
Operating Activities
Net Income
Adjustments:
Noncash adjustment:
Depreciation
Due to changes in working capital:
Due to change in accounts receivable
Due to change in inventories
Due to change in accounts payable
Due to change in accruals
Net cash provided (used) by operating activities
Investing Activities
Cash used to acquire gross fixed assets
Due to change in short-term investments
Net cash provided (used) by investing activities
Financing Activities
Due to change in notes payable
Due to change in long-term debt
Due to change in common stock
Payment of common dividends
Net cash provided (used) by financing activities
Net increase/decrease in cash
Add: Cash balance at the beginning of the year
Cash balance at the end of the year
Check: cash balance in statement of cash flows should equal the cash on balance sheets as shown here:
				$102,805

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