# ABC Limited Company Accounting Help

Question 1
You are given the following information for ABC Limited:

 2017 Sales \$1,200,000 Cost of goods sold \$700,000 Other operating expenses \$140,000 Depreciation expense \$60,000 Interest \$35,000 Dividends \$45,000

 2016 2017 Cash \$500,000 \$600,000 Accounts receivable \$300,000 \$350,000 Inventory \$200,000 \$250,000 Net fixed assets \$1,500,000 \$1,600,000 Current liabilities \$400,000 \$600,000 Long-term debt \$700,000 \$800,000 Tax rate 30% 30%
1. Calculate the earnings before interest and taxes (EBIT) for 2017. Show your calculation.
b. Calculate the amount of income taxes for 2017. Show your calculation.
(Hint: Income taxes = Income before taxes x Tax rate)
c. What was the cash flow from assets for 2017? Show your calculation.
d. What was the cash flow to creditors for 2017? Show your calculation.
e. What was the cash flow to shareholders for 2017? Show your calculation.
BUSI 2019 Fall 2017 Assignment 1
Question 2
The following information was obtained from DEF Corporation:
 2017 EBIT \$2,000,000 Interest \$500,000 Depreciation \$1,000,000 Dividends \$550,000

 2016 2017 Long-term debt \$6,000,000 \$6,000,000

## ABC Limited Company Accounting Help

Capital spending was \$1,500,000 in 2017. The net new equity issuance was \$500,000 in 2017.
The applicable tax rate was 30% in year 2017.
Calculate the change in net working capital for 2017. Show your calculation.
(Hint: Income taxes = Income before taxes x Tax rate)
Question 3
In 2017, ABC Corporation purchased a new truck (asset class 10) with a CCA rate of 30% for
\$50,000. The company also spent \$30,000 to purchase a new rental car (asset class 16) with a
CCA rate of 40%.
Calculate the total CCA for ABC Corporation for each of the first three years. Show your
calculation.
Question 4
We learned in class that agency problems arise in corporations. Can agency problems arise in
sole proprietorships and/or partnerships as well? Explain.