Note: The common shares are trading in the stock market for $15 per share. Using

ID: 2712530 • Letter: N

Question

Note: The common shares are trading in the stock market for $15 per share.

Using the financial statements for Flathead Lake, calculate cash from operating activities and cash from investing activities.

Flathead Lake Manufacturing Income Statement 2012 Selling and Administrative Expenses 2.200,000 Flathead Lake Manufacturing Comparative Balance Sheets 2011 Total Current Assets 2,050,000 1,400,000 3,200,000 $2,500,000 Total Current Liabilities 1,500,000 1,000,000 $2,300,000 $1,700,000 Total Liabilities Common Stock (200,000 shares) $ 900,000 800,000 3,200,000 $2,500,000 Total Liabilities and Equity

Explanation / Answer

Cash flow from operating activities

Net Income

225000

Depreciation

550000

Cash flow before working capital changes

775000

Accounts receivables decreased

30000

Inventory increased

-70000

Accounts payable increased

20000

Bank loans increased

80000

Cash flow from operating activities

1610000

Cash flow from financing activities

Long term bond issued

500000

Dividend paid (225,000-100,000)

-115000

Cash flow from financing activities

385000