C214 - CALCULATION QUESTIONS WITH
COMPLETE SOLUTIONS 2026
Sales revenue is 500, operating expenses is 250, depreciation is 200, and the tax rate is 25%. What is
the net income? - CORRECT ANSWER -Net Income= Sales Revenue - operating expenses -
depreciation = X (1 - tax rate) = Net Income
500-250-200= 50 (1-.25) = 37.5
If net income is 100 and the payout ratio is 35%, what is the addition to retained earnings? -
CORRECT ANSWER -Net Income = Dividends + Addition to Retained Earnings
Retained Earnings = Net Income - Dividends (% x Net Income)
Dividends = .35 x 100 = 35
=100 - 35 = 65
A firm has sales of 400, a net margin of 20%, and a payout ratio of 25%. How much is added to retain
ed earnings? - CORRECT ANSWER -Net Income = Dividends + Addition to Retained Earnings
Retained Earnings = Net Income - Dividends (% x Net Income)
Net Income = .20 x 400 = 80
Dividends = .25 x 80 = 20
=80 - 20 =60
If current assets increase by 200 and long-
term debt increases by 300, what is the impact on cash flow? - CORRECT ANSWER -= assets -
liabilities
= 200 - 300 = 100
What is CFO (Cash Flow Operations), given:
, Net Income 100,000
Depreciation 20,000
Change in A/R 10,000 - CORRECT ANSWER -CFO = Net Income + Depreciation - NWC (A/R)
CFO = 100,000 + 20,000 - 10,000 = 110,000
What is CFI (Cash Flow Investing), given:
Gross Equipment (jan) 50,000
Gross Equipment (dec) 65,000
Net Income 100,000
Depreciation 20,000 - CORRECT ANSWER -CFI = (Net PPE)x(-1)
=(50,000-65,000)x(-1) = -15,000
What is the CFI, given:
Beginning Net PPE 250,000
Ending Net PPE 300,000
Depreciation Expense 40,000
Ending Gross PPE 500,000 - CORRECT ANSWER -CFI = (Net PPE + Depreciation)x(-1)
=((250,000-300,000) + 40,000))x(-1) = -90,000
What is CFF (Cash Flow Financing), given:
A/P 100,000
Accrued Expenses 50,000
Increase in Bonds Payable 300,000
Decrease in Equity 75,000
Dividends Paid 80,000 - CORRECT ANSWER -CFF=Increase in Long-term Debt + Increase in Stocks -
Dividends
COMPLETE SOLUTIONS 2026
Sales revenue is 500, operating expenses is 250, depreciation is 200, and the tax rate is 25%. What is
the net income? - CORRECT ANSWER -Net Income= Sales Revenue - operating expenses -
depreciation = X (1 - tax rate) = Net Income
500-250-200= 50 (1-.25) = 37.5
If net income is 100 and the payout ratio is 35%, what is the addition to retained earnings? -
CORRECT ANSWER -Net Income = Dividends + Addition to Retained Earnings
Retained Earnings = Net Income - Dividends (% x Net Income)
Dividends = .35 x 100 = 35
=100 - 35 = 65
A firm has sales of 400, a net margin of 20%, and a payout ratio of 25%. How much is added to retain
ed earnings? - CORRECT ANSWER -Net Income = Dividends + Addition to Retained Earnings
Retained Earnings = Net Income - Dividends (% x Net Income)
Net Income = .20 x 400 = 80
Dividends = .25 x 80 = 20
=80 - 20 =60
If current assets increase by 200 and long-
term debt increases by 300, what is the impact on cash flow? - CORRECT ANSWER -= assets -
liabilities
= 200 - 300 = 100
What is CFO (Cash Flow Operations), given:
, Net Income 100,000
Depreciation 20,000
Change in A/R 10,000 - CORRECT ANSWER -CFO = Net Income + Depreciation - NWC (A/R)
CFO = 100,000 + 20,000 - 10,000 = 110,000
What is CFI (Cash Flow Investing), given:
Gross Equipment (jan) 50,000
Gross Equipment (dec) 65,000
Net Income 100,000
Depreciation 20,000 - CORRECT ANSWER -CFI = (Net PPE)x(-1)
=(50,000-65,000)x(-1) = -15,000
What is the CFI, given:
Beginning Net PPE 250,000
Ending Net PPE 300,000
Depreciation Expense 40,000
Ending Gross PPE 500,000 - CORRECT ANSWER -CFI = (Net PPE + Depreciation)x(-1)
=((250,000-300,000) + 40,000))x(-1) = -90,000
What is CFF (Cash Flow Financing), given:
A/P 100,000
Accrued Expenses 50,000
Increase in Bonds Payable 300,000
Decrease in Equity 75,000
Dividends Paid 80,000 - CORRECT ANSWER -CFF=Increase in Long-term Debt + Increase in Stocks -
Dividends
