Some recent financial statements for Smolira Golf Corp. follow SMOLIRA GOLF CORP

Question

Some recent financial statements for Smolira Golf Corp. follow SMOLIRA GOLF CORP 2014 and 2015 Balance Sheets Assets Liabilities and Owners' Equity 2014 2015 2014 Current assets Current liabilities Cash Accounts receivable Inventory $ 24,236 14,348 27,892 $ 26,000 17,100 29,000 Accounts payable Notes payable Other $ 25,084 19,000 13,471 $ 29,000 12,700 18,300 Total $ 66,476 $ 72,100 Total 57,555 $ 60,000 $ 88,000 $ 99,000 Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings 45,000 219,616 $45,000 233,000 Fixed assets Net plant and equipment$343,695 $364,900 Total $264,616 $278,000 Total assets $410,171 $437,000 Total liabilities and owners' equity $410,171 $437,000 SMOLIRA GOLF CORP 2015 Income Statement Sales Cost of goods sold Depreciation $392,640 257,000 48,800 Earnings before interest and taxes Interest paid 86,840 16,200 Taxable income Taxes (40%) $ 70,640 28,256 Net income $ 42,384 Dividends Retained earnings $29,000 13,384

Explanation / Answer

SMOLIRA GOLF CORP Statement of Cash flows For 2015 Cash, beginning of the year $24,236 Cash flows from operating activities Profit before taxation $70,640 Adjustments for: Depreciation $48,800 Amortization of copyrights Gain on Sale of Equipment Working capital changes: Increase in Accounts Receivable ($2,752) (14348-17100) Increase in inventories ($1,108) (27892-29000) Increase in Accounts Payable $3,916 (29000-25084) Decrease in Notes Payable ($6,300) (12700-19000) Increase in Other Liabilities $4,829 (18300-13471) Taxes Paid ($28,256) Cash generated from operations Net cash from operating activities 89769 Cash flows from investing activities Purchase of Plant and Equipment ($70,005) (343695-48800-364900) Net cash used in investing activities -70005 Cash flows from financing activities Long Term debt taken $11,000 (99000-88000) Dividend paid ($29,000) Net cash used in financing activities ($18,000) Net increase in cash and cash equivalents 1764 Cash and cash equivalents at end of period 26000

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