36. Income versus cash flows. Construct a statement of cash flows for Fincorp fo

Question

36. Income versus cash flows. Construct a statement of cash flows for Fincorp for 2014.

Fincorp Inc. 2013 2014 $A,000.00 S4,100.00 1,600.001,700.00 500.00 520.00 300.00 350.00 500.00 550.00 150.00 150.00 Revenue Depreciation Inventories Admin Expenses Interest Exp Fed and state taxes Accounts payable Accounts receivable Net fixed assets Long-term debt Notes payable Dividends paid Cash and marketable securities 400.00 300.00 400.00 350.00 5,000.00 5,800.00 2,000.00 2,400.00 1,000.00 600.00 10.00410.00 800.00 30o.00

Explanation / Answer

Calculation of Net Income Year 2014 Revenue $4,100.00 Less : COGS $1,700.00 Less : Depreciation $520.00 Less : Admin exp. $550.00 EBIT $1,330.00 Less : Interest exp. $150.00 Profit before tax $1,180.00 Less : Fed and state taxes $420.00 Net Income $760.00 Statement of cash flow for 2014 Cash flow from operating activities Net Income 760 Changes in Net Working Capital Increase in Inventory -50 Increase in Accounts Receivable -50 Increase in Accounts Payable 50 -50 Cash Flow from Investing activities Increase in Fixed assets -800 Cash Flow from Financing activities Increase in Long term debt 400 Decrease in Notes payable -400 Divdend Paid -410 -410 Net Increase or (Decrease in Cash) -500 (+) Cash and Markatable securities (2013) 800 Cash and Markatable securities (2014) 300

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