Consider the following abbreviated financial statements for

Consider the following abbreviated financial statements for Weston Enterprises: WESTON ENTERPRISES 2016 and 2017 Partial Balance Sheets A?sets Liabilities and owners\' Equity Current assets Net fixed assets 2016 2017 920 $1,005 Current liabilities 3,857 4,548 Long-term debt 2016 2017 $ 365 413 2,000 2,132 WESTON ENTERPRISES 2017 Income Statement Sales Costs Depreciation Interest paid $11,500 5,510 1,010 180 a. What was owners\' equity for 2016 and 2017? (Do not round intermediate calculations.) Owners\' equity 2016 Owners\' equity 2017 2,412 3,008 b. What was the change in net working capital for 2017? (Do not round intermediate calculation Change in NWC 37 810 in new fixed assets. How much in fixed assets did the

Solution

a) Owners equity for 2016 = Total assets - Total liabilities = 3857 + 920 - 2000 -265 = 2412
Owners equity for 2016 = Total assets - Total liabilities = 4548 + 1005 - 2132 -413 = 3008
b) Change in NWC = (current assets of 2017 - Current laiblities of 2017) - (Current assets of 2016 - Current laiblities of 2016) = (1005 - 413 ) - ( 920- 365) = 37
c-1) Fixed asset sold = Net fixed assets in 2016 + Fixed assets bought -Net Fixed asset in 2017 = 3857 + 1810 - 4548 - depreciation = 1119 - 1010 = 109
c-2) Cash flow from assets = Operating Income(11500 -5510 -1010-180)+ Depreciation   + Net cash from fixed assets- Net Working capital = 4800+ 1010 + 109 -37 = 5882
d-1) Debt retired = Debt of 2016 + New debt - Debt at 2017 = 2000 + 360 - 2132 = 228
d-2) Cash flow to creditors = Debt of 2016 + New debt - Debt at 2017 - Net working capital of 2017= 2000 +360 -2132 -37 = 191

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