The most recent financial statements for Alexander Co. are shown here: Income Statement Balance Sheet Sales $ 42,800 Current assets $ 17,500 Long-term debt $ 37,000 Costs 35,500 Fixed assets 68,300 Equity 48,800 Taxable income $ 7,300 Total $ 85,800 Total $ 85,800 Taxes (23%) 1,679 Net income $ 5,621 Assets and costs are proportional to sales. The company maintains a constant 40 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)
Bear Co. prepares its statement of cash flows using the indirect method. Bear sold equipment with a carrying value of $500,000 for cash of $400,000. How should Bear report the transaction in the operating and investing activities sections of its statement of cash flows? Operating Activities / / Investing Activities
a. $100,000 addition to net income / / $400,000 cash inflow
b. $100,000 subtraction from net income / / $400,000 cash inflow
c. $100,000 addition to net income / / $500,000 cash inflow
d. $100,000 subtraction from net income / / $500,000 cash inflow