Question

• The Rundell Corporation is financed by both long-term debt and common equity.
• As part of the company’s common equity portfolio, it has 32,000 ordinary shares outstanding and dividends per share were $4.25.
• The firm’s operating profit for the year was $199,000 and the applicable corporate tax rate was 40%.
• Construct the statement of cash flows for Rundell Corporation, using the information provided in the company’s financial statements below.
Income Statement
for the year ended 30 June 2018
Sales 1,180,000
Cost of goods sold ( 790,000)
Gross profit    390,000
Selling, general and admin. expenses     ( 184,000)
EBITDA    206,000
Depreciation and amortization
EBIT
Interest expense (    9,000)
EBT    190,000
Income tax expense
Net income   
Comparative Balance Sheet
as of 30 June 2018 and 30 June 2017
   2018 2017
Assets
Cash       77,000 26,000
Accounts receivable      74,000 65,000
Inventory     132,000 180,000
Gross land     105,000 80,000
Gross building     240,000 200,000
Total assets     628,000 551,000
Liabilities and Equity
Accounts payable      43,000 46,000
Notes payable    128,000 14,000
Accruals      45,000 24,000
Long-term debt    110,000        150,000
Common stock      61,000 61,000
Retained earnings    241,000       256,000
Total liabilities and equity      628,000        551,000

Answer 1