Question

Valley Technology had Net Income for 2019 of $9,600,000.

The firm invested $5,000,000 in manufacturing equipment during 2018 but made no additional capital investments in 2019.
The equipment is being depreciated over five years using straight-line depreciation, starting in 2018.

Assuming no other adjustments to cash flow than those mentioned here, create a statement of cash flows for 2019 with amounts in thousands.

What is the Net Cash Flow in 2019?

Note: Financial results are provided in dollars but the income statement units are thousands of dollars.

Please specify your answer in the same units as the statement of cash flows (i.e., enter the number from your completed statement of cash flows).

Answer 1

a) Cash flow statement : Indirect Method
Cash flows from operating activities:	Working	Amount $
Net Income	$            9,600.00
Adjustments:
Depreciation expense($5000/5 year)	$            1,000.00
Operating profit from before working capital changes	$         10,600.00
Accounts receivable (increase)/decrease	$                        -
Account payable (decrease)/increase	$                        -
Cash generation from operation	$         10,600.00
Income tax expense	$                        -
Net cash provided by operating activities		$         10,600.00
Cash flows from investing activities:
Net proceeds/(Purchase) of Investment
Net proceeds/(Purchase) of Equipment
	$                        -
Net cash used in investing activities		$                        -
Cash flows from financing activities:
Net proceeds/(Repayment))of Bond Payable
Net proceeds/(Repayment))of Issue of Common stock
Dividend paid
Net cash provided by financing activities		$                        -
Net increase in cash		$         10,600.00
Opening Cash balance,
Closing Cash balance,		$         10,600.00