Use the financial statements on the next page to answer 8. Construct the cash fl
ID: 2755950 • Letter: U
Question
Use the financial statements on the next page to answer
8. Construct the cash flow statement for the year 2014
Income Statement
2012
2013
2014
Sales Revenues
130,000
150,000
COGS (including Depreciation)
85,800
105,000
Depreciation
20,000
25,000
S&A Expenses
15,000
18,000
Operating Income
29,200
27,000
Interest Expense
12,000
15,000
Taxable Income
17,200
12,000
Income Tax (40%)
6,880
4,800
Net Income
10,320
7,200
Balance Sheet
2007
2008
2009
Cash & MS
20,000
30,000
28,000
Accounts Receivable
40,000
50,000
60,000
Inventories
75,000
80,000
100,000
Net PPE
120,000
140,000
160,000
Total Assets
255,000
300,000
348,000
Liabilities
Accounts Payable
50,000
60,000
85,000
Short-term Debt
45,000
72,000
85,000
LT Debt (8% Bonds)
75,000
74,000
80,000
Total Liabilities
170,000
206,000
250,000
Shareholders Equity
85,000
94,000
98,000
Price per share
$ 85.00
$ 77.00
No of shares
10,000
10,000
10,000
Dividends Paid
1,320
3,200
Income Statement
2012
2013
2014
Sales Revenues
130,000
150,000
COGS (including Depreciation)
85,800
105,000
Depreciation
20,000
25,000
S&A Expenses
15,000
18,000
Operating Income
29,200
27,000
Interest Expense
12,000
15,000
Taxable Income
17,200
12,000
Income Tax (40%)
6,880
4,800
Net Income
10,320
7,200
Balance Sheet
2007
2008
2009
Cash & MS
20,000
30,000
28,000
Accounts Receivable
40,000
50,000
60,000
Inventories
75,000
80,000
100,000
Net PPE
120,000
140,000
160,000
Total Assets
255,000
300,000
348,000
Liabilities
Accounts Payable
50,000
60,000
85,000
Short-term Debt
45,000
72,000
85,000
LT Debt (8% Bonds)
75,000
74,000
80,000
Total Liabilities
170,000
206,000
250,000
Shareholders Equity
85,000
94,000
98,000
Price per share
$ 85.00
$ 77.00
No of shares
10,000
10,000
10,000
Dividends Paid
1,320
3,200
Explanation / Answer
Cash Flow Statement as on 31st December 2014 Cash flow from operating activity Net Income 7200 Depriciation 25000 Increase in account receivable -10000 (60000-50000) Increase in inventories -20000 (100000- 80000) Increase in ST debt 13000 (85000- 72000) Increase in account payables 25000 (85000 - 60000) Cash generated from operations 40200 Cash flow from operating activity Purchase of PPE -20000 ( 160000 -140000) Net cash used in investing activity -20000 Cash flow from financing activity Net Proceeds from issue of shares -25000 Proceeds from issuance of long term debt 6000 (80000 - 74000) Dividends paid -3200 Net cash used in financing activity -22200 Net Increase in cash and cash equivalent -2000 Cash andcash equivalent at beginning of the period 30000 Cash andcash equivalent at end of the period 28000 Note The balance sheet dates are 2007 , 2008 and 2009 ,whereas income statement dates are 2012 , 2013 and 2014 Iam not sure if they relate to the same period
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