The income statement and addnal data of Sevale Services, Inc., follow ( ick the
ID: 2599423 • Letter: T
Question
The income statement and addnal data of Sevale Services, Inc., follow ( ick the icon to view the income statement )(Click the icon to view the additional da Read the raquirements - X Data Table More Info Statement of Cash Flows Sevale Services, Inc. Income Statement Year Ended September 30, 2016 Additional data: Year Ended September 30, 2016 a. Acquisition of fixed assets totaled $120,000. Of this amount, 590,000 Cash flows from operating activities: was paid in cash and a $30,000 note payable was signed for the remainder Net income b. Proceeds from the sale of land totaled $21,000. No gain or loss was Revenues: Adjustments to reconcile net income to nat cash recognized on the sale. c. Proceeds from issuance of common stock totaled $30,000 d. Payment of long-term nota payable was 59,000 e. Payment of dividends was $17,000 f. Data from the comparative balance sheat follow: 5 262,000 14,000 Sales revenue provided by operating activities Dividend revenue Total revenues S 276,000 Expenses September 30 Current Assets: Cash Accounts receivable Inventory Current Liabilities Accounts payable Accrued liabilities Cost of goods sold Salaries expense Depreciation expense Advertising expense Interest expense Income tax expense $ 109,000 42,000 18,000 14,000 3,000 12.000 2016 2015 Net cash provided by (used for) operating activities Cash lows from investing activities: 3 58,000 S 24,000 60,000 76,000 48,000 37,000 $ 36,000 S 22,000 Total expenses 198,000 Net cash provided by (usad for) investing activities Cash flows from financing activities 24,000 36,000 S 78,000 Net income Print Done Print Done Choose from any list or enter any number in the input fields and then continue to the nextExplanation / Answer
1) Statement of cash flows year ended september 30,2016 (Amount in $)
2) Free cash flow for the year ended September 30, 2016
= Net cash provided by operating activities - Capital expenditure
= $88,000 - $120,000 = ($32,000)
3) Sevale Services operations provided net cash flows of $34,000. The majority of the cash flow came from Operating activities, as it should in a successful company. The cash used in investing activities is a good indication that the company is expading its capital base and the net cash provided by financing activities of $1,000 indicates that the company has net inflow of cash from financing activities. The negative free cash flow indicates that the company does not have free cash available for capital expenditures.
Cash flows from operating activities Net Income 78,000 Adjustments to reconcile net income to net cash provided by operating activities Add: Depreciation expense 18,000 Add: Interest expense 3,000 Less: Dividend Revenue (14,000) Add: Decrease in Accounts Receivable (60,000-48,000) 12,000 Less: Increase in Inventory (87,000-76,000)) (11,000) Add: Increase in Accounts Payable (36,000-22,000) 14,000 Less: Decrease in Accrued liabilities (36,000-24,000) (12,000) Total amount for adjustments 10,000 Net cash provided by (used for) operating activities (A) 88,000 Cash flow from investing activities Purchase of Fixed Assets (120,000-30,000) (90,000) Sale of Land 21,000 Dividend Revenue 14,000 Net cash provided by (used for) investing activities (B) (55,000) Cash flow from financing activities Interest Paid (3,000) Dividend Paid (17,000) Proceeds from issue of common stock 30,000 Payment of long term note payable (9,000) Net cash provided by (used for) financing activities (C) 1,000 Net increase or (decrease) in cash during the year (A+B+C) 34,000 Add: Cash balance, September 30, 2015 24,000 Cash balance, September 30, 2016 58,000Related Questions
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