1. Income Statements 2013 2014 Net Sales $1,500,000 $1,800,000 Cost of Goods Sol

Question

1. Income Statements 2013 2014 Net Sales $1,500,000 $1,800,000 Cost of Goods Sold 900,000 1,260,000 Gross Profit 600,000 540,000 Marketing 150,000 200,000 General & Administrative 150,000 200,000 Depreciation 53,000 60,000 EBIT 247,000 80,000 Interest 57,000 70,000 Earnings Before Taxes 190,000 10,000 Income Taxes 76,000 4,000 Net Income $114,000 $6,000 Balance Sheets 2013 2014 Cash $40,000 $10,000 Accounts Receivables 260,000 360,000 Inventories 500,000 600,000 Total Current Assets 800,000 970,000 Fixed Assets, Net 400,000 500,000 Total Assets $1,200,000 $1,470,000 Accounts Payable $170,000 $180,000 Accruals 70,000 80,000 Bank Loan 90,000 184,000 Total Current Liabilities 330,000 444,000 Long-Term Debt 400,000 550,000 Common Stock 350,000 350,000 Retained Earnings 120,000 126,000 Total Liab. & Equity $1,200,000 $1,470,000 What is the cash flow from operating activities for 2014? $117,000 $114,000 $-114,000 $-117,000 $-14,000

Explanation / Answer

Cash flows from operating activities Net income $6,000 Adjustments for: Depreciation and amortization $60,000 $60,000 Provision for losses on accounts receivable Gain on sale of facility Increase in trade receivables -100,000 Increase in inventories -100,000 increase in accounts payables 10,000 increase in accruals 10000 Increase in loan -180,000 Cash generated from operations -114,000

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