Barry Bonds Baseball is interested in adding a location in the Rochester area an

Question

Barry Bonds Baseball is interested in adding a location in the Rochester area and is requesting a S300,000 loan from your bank. Before your bank will consider the request they want to see the Financial Statements for the most recent year. Barry Bonds Baseball has prepared the attached Income Statement and Balance Sheet and has asked you to help them prepare the Statement of Cash Flow. Required: A). Prepare a properly formatted Statement of Cash Flow for the Year 2018 for Barry Bonds Baseball.. (10points) "0frw sauts B). Prepare a horizontal and vertical analysis of the income statement. (8 points) C). Calculate the following ratios for Barry Bonds Baseball for 2018 and 2017. (8 points) Current Ratio Debt/Equity Ratio Gross Profit % Return on Equity % DGn D). Assume you are the loan officer for the bank and have been given the complete set of e+ Financial Statements (including the Statement of Cash Flow, horizontal and vertical what analysis, and ratio analysis). Answer the following question using complete d sentences and proper English. Answer should be typed. (14 points) 1). Would you approve the bank loan based on the financial results? Justify and explain your answer. You have to analyze all the information and explain your decision in a well thought out and well written explanation. Proper English is expected and 2 sentences is not enough! Due Date: Thursday, April 5, 2018 The two take home assignments are graded the same as a Quiz and count the same as a quiz in calculating your final average so allocate your time appropriately Grading: Note: Make sure this sheet is attached to your answer.

Explanation / Answer

Cash flow indirect method Cash flow from operating activities Net income 61700 Adjustments to reconcile the net income Depreciation expense 20300 Gain on sale of investment -4000 Changes in current asset and liabilities Increase in prepaid insurance Increase in accounts receivable -5400 Increase in Inventory -16700 decrease in accounts payable -13200 decrease in accrued expense -1800 -20800 Cash flow from operating activities 40900 Cash flow from Investing activities Sales of investment 34000 Equipment purchased -45000 Land purchased -78500 Cash flow from Investing activities -89500 Cash flow from Financing activities Common stock 2000 Paid in capital in excess of par 66000 Dividend paid -25100 Cash flow from Financing activities 42900 Net Cash and cash equivalent -5700 Add Beginning cash and cash equivalent 83500 Ending cash and cash equivalent 77800

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