Using the data provided, prepare a complete Statement of Cash Flows using both t
ID: 2423233 • Letter: U
Question
Using the data provided, prepare a complete Statement of Cash Flows using both the direct and the indirect method for determining the cash flow from operating activities. Note that you will need to calculate items such as dividends paid for the year (Retained Earnings2014 + Net income2015 – Retained Earnings2015 = Dividends paid2015), and fixed asset acquisitions (Net Fixed Assets2014 – Net Book Value of Fixed Assets Sold2015 – Depreciation Expense2015 – Net Fixed Assets2015 = New fixed assets acquired2015. Please submit your work in an Excel spreadsheet via the assignment submission feature in Blackboard.
Balance Sheet
Income Statement
Assets
2015
2014
2015
Cash
$552
$398
Sales
$3,425
Accounts receivable
368
360
Cost of goods sold
2,713
Inventories
422
517
Gross profit
712
Other current assets
81
180
Operating expenses
272
Total current assets
1,423
1,455
Depreciation expense
139
Gross fixed assets
2,798
2,472
Amortization expense
6
Accumulated depreciation
(1,611)
(1,498)
Operating income (EBIT)
295
Net fixed assets
1,187
974
Interest expense
28
Investment in affiliates
46
43
Equity in earnings (loss) of affiliate
3
Intangible assets
157
163
Gain (loss) on sale of fixed assets
25
Other noncurrent assets
131
103
Income before taxes
295
Total assets
$2,944
$2,738
Tax expense
112
Net income
$183
Liabilities and Equity
Accounts payable
258
302
Accrued expenses
174
211
Taxes payable
74
90
Short-term debt
67
40
Current portion of long-term debt
52
40
Other current liabilities
16
11
Total current liabilities
641
694
Long-term debt
390
239
Deferred income taxes
25
27
Other noncurrent liabilities
651
620
Total liabilities
1,707
1,580
Common stock
15
11
Additional paid-in capital
122
68
Retained earnings
1,100
1,079
Total equity
$1,237
$1,158
Total liabilities and equity
$2,944
$2,738
Footnote
During the year, the company received cash of $100 when it sold fixed assets that had a stated net book value of $75, which gave rise to the $25 gain that appears on the income statement.
Note: Check figure for cash flow from operations = $395.
Balance Sheet
Income Statement
Assets
2015
2014
2015
Cash
$552
$398
Sales
$3,425
Accounts receivable
368
360
Cost of goods sold
2,713
Inventories
422
517
Gross profit
712
Other current assets
81
180
Operating expenses
272
Total current assets
1,423
1,455
Depreciation expense
139
Gross fixed assets
2,798
2,472
Amortization expense
6
Accumulated depreciation
(1,611)
(1,498)
Operating income (EBIT)
295
Net fixed assets
1,187
974
Interest expense
28
Investment in affiliates
46
43
Equity in earnings (loss) of affiliate
3
Intangible assets
157
163
Gain (loss) on sale of fixed assets
25
Other noncurrent assets
131
103
Income before taxes
295
Total assets
$2,944
$2,738
Tax expense
112
Net income
$183
Liabilities and Equity
Accounts payable
258
302
Accrued expenses
174
211
Taxes payable
74
90
Short-term debt
67
40
Current portion of long-term debt
52
40
Other current liabilities
16
11
Total current liabilities
641
694
Long-term debt
390
239
Deferred income taxes
25
27
Other noncurrent liabilities
651
620
Total liabilities
1,707
1,580
Common stock
15
11
Additional paid-in capital
122
68
Retained earnings
1,100
1,079
Total equity
$1,237
$1,158
Total liabilities and equity
$2,944
$2,738
Explanation / Answer
Answer: dividends paid for the year =(Retained Earnings2014 + Net income2015 – Retained Earnings2015 = Dividends paid2015)
=(1079+183-1100)
=$162
fixed asset acquisitions =(Net Fixed Assets2014 – Net Book Value of Fixed Assets Sold2015 – Depreciation Expense2015 – Net Fixed Assets2015 = New fixed assets acquired2015
=974-75-139-1187=-426
Cash Flow Sattement Particulars Amount Net income 183 Add: Depreciation exepnse 153 Add: taxes 112 Gain (loss) on sale of fixed assets -25 Less: Dividend paid -162 Amortization expense 6 Equity in earnings (loss) of affiliate -3 Increase in AR -8 Dec in inventory 95 Dec in other CA 99 Dec in AP -44 Dec in Accrued exp -37 Dec in taxes payable -16 Inc in other current liabilities 5 Inc in current portion of long term debt 12 Inc in short term debt 27 Dec in deferred tax -2 Cash flow from operations 395Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.