Home supply, inc. has compiled the following information: 2015 2016interest paid $ 10,500 $ 11,400long-term debt 287,400 293,500sales 614,200 718,900common stock 280,000 294,500accounts payable 42,600 58,700depreciation 38,400 43,700accounts receivable 54,200 59,000inventory 121,600 128,300other costs 46,800 42,100taxes 16,100 20,200cash 18,200 9,500retained earnings 65,400 89,800net fixed assets 481,400 539,700cost of goods sold 471,100 562,300for 2016, the cash flow from assets is and the cash flow to stockholders is ) $5,600; $300b) $5,600; $15,100c) $5,600; $14,500d) $6,300; $300e) $6,300; $14,500

For 2016 the cash flow from assets is $5600  and the cash flow to stockholders is $300

so correct option is  A) $5,600; $300

Explanation:

solution

we find first operating cash flow  for 2016 that is

operating cash flow  = $718,900 - $562,300 - $42,100 - $20,200

operating cash flow  = $94,300

and

Change in net working capital  will be here

Change in net working capital = ($9,500 + $59,000 + $128,300 - $58,700) - ($18,200 + $54,200 + $121,600 - $42,600)

Change in net working capital=  -$13,300

and

Net capital spending will be here

Net capital spending = $539,700 - $481,400 + $43,700

Net capital spending = $102,000

so Cash flow from assets will be

Cash flow from assets = $94,300-102,000 - (-$13,300)

Cash flow from assets = $5,600

and

now Cash flow to creditors is calculate as

Cash flow to creditor = $11,400- ( $293,500 - 287,400)

Cash flow to creditor = $5,300

and

Addition to retained earning will be

Addition to retained earning = $89,800-65,400

Addition to retained earning = $24,400

so

Net income will be here  as

Net income = $718,900 - $562,300 - $42,100 - $43,700 - $11,400 - $20,2000

Net income = $39,200

so that

Dividends is  paid here

Dividends paid =  $39,200 - $ 24,400

Dividends paid = $14,800

so that Cash flow to stockholders will be

Cash flow to stockholders = $14,800- ( $294,500 - $280,000)

Cash flow to stockholders = $300

and  

Cash flow from assets  will be = $5,300 + 300

Cash flow from assets  = $5,600