Question

Create the statement of cash-flow with indirect method

Interpret the result of the statement of cash flow with percentage

Instruction:

[1] Please use the balance sheet as follows to classify each activity (operating, investing, and financing) from the column of different.

[2] please create a new statement of cash-flow from your classification on balance sheet.

[3] The statement of cash flow will be provided to measure the company’s cash flow situation. Also, you need to interpret the result of your measurement.

Balance sheet
SILVERT CORPORATION
Balance Sheet
December 31
			Different	Operating	Investing	Financing
	2012	2011
ASSET
Cash	$ 28,000	$ 20,000	$8,000
Receivable (net)	70,000	62,000	$8,000
Other current assets	90,000	73,000	$17,000
Long-term investment	62,000	60,000	$2,000
Plant and equipment (net)	510,000	470,000	$40,000
Total Assets	$ 760,000	$ 685,000	$75,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities	$ 75,000	$ 70,000	$5,000
Long-term debt	80,000	90,000	($10,000)
Common stock	330,000	300,000	$30,000
Retained earnings	275,000	225,000	$50,000
Total liabilities and stockholders’ equity	760,000	685,000	$75,000

]2] Create the statement of cash-flow by using the indirect method. Company has net income as starting point of $80,000.

                                                        STATEMENT OF CASH FLOW

Operating Activities
Net Income	$ 80,000
Cashflow from Operations
Investing Activities
Cashflow from Investing
Financing Activities
Cashflow from Financing

Answer 1

Answer 1.
Silvert Corporation
Balance Sheet
December 31
			Difference	Operating	Investing	Financing
	2012	2011
Asset
Cash	28,000.00	20,000.00	8,000.00
Receivable (Net)	70,000.00	62,000.00	8,000.00	8,000.00
Other Current Assets	90,000.00	73,000.00	17,000.00	17,000.00
Long Term Investment	62,000.00	60,000.00	2,000.00		2,000.00
Plant & Equipment (Net)	510,000.00	470,000.00	40,000.00		40,000.00
Total Assets	760,000.00	685,000.00
Liabilities & Stockholders' Equity
Current Liabilities	75,000.00	70,000.00	5,000.00	5,000.00
Long Term Debt	80,000.00	90,000.00	(10,000.00)			(10,000.00)
Common Stock	330,000.00	300,000.00	30,000.00			30,000.00
Retained Earnings	275,000.00	225,000.00	50,000.00
Total Liabilities & Stockholders' Equity	760,000.00	685,000.00
Answer 2.
Silvert Corporation
Statement of Cash Flows (Indirect Method)
For the Year ended Dec 31, 2012
Cash Flow from opearating activities:
Net Income		80,000
Add/(Less) non cash effects on operating activities
Increase in Accounts Receivables	(8,000)
Increase in Other Current Assets	(17,000)
Increase in Current Liabilities	5,000	(20,000)
Net Cash provided by operating activities		60,000
Cash flow from Investing Activities
Purchase of Long Term Investment	(2,000)
Purchase of Plant & Euipment (net)	(40,000)
Net Cash used by Investing activities		(42,000)
Cash Flow from Financing Activities
Paymnet of Long Term debt	(10,000)
Issue of Common Stock	30,000
Cash dividend paid	(30,000)
Net Cash used by Financing activities		(10,000)
Net Increase / (Decrease) in Cash		8,000
Cash balance at the beginning - Dec 31, 2011		20,000
Cash balance at the end - Dec 31, 2012		28,000
Calculation of Dividend Paid:
Retained Earnings - Dec 31, 2011	225,000.00
Add: Net Income	80,000.00
Sub-total	305,000.00
Retained Earnings - Dec 31, 2012	275,000.00
Dividend Paid	30,000.00
Answer 3.
The Company Cash Condition is good. The Cash flow from Opeearting Activities are more than Cash used in Investing Activities.