Question

Please prepare cash flow for every year based on the information provided:

	Alison the Architect
	Income statement
	for the years ended December 31					20X1		20X2		20x3
	Sales					$127,970		$152,280		$201,000
	Salary expenses					37,440		40,440		44,520
	Rent expenses					14,400		15,600		17,160
	Phone expenses					4,560		4,920		5,400
	Office supplies expenses					4,670		5,400		8,040
	Utilities expenses					186,000		20,040		22,080
	Insurance expenses					9,300		10,151		11,590
	Kitchen supplies expenses					8,490		7,480		7,670
	Professional service expenses					1,300		1,840		1,730
	Depreciation expenses					7,812		9,565		10,879
	Pretax income					21,398		36,844		71,931
	Tax expenses					8,559		14,738		28,772
	Net income					$12,839		$22,106		$43,159
	Earning per share					$0.19		$0.32		$0.64
	Alison the Architect
Statement of Owner's Equity			Common		Additional		Retained Earnings		Total
for the years ended December 31			Stock		paid in capital
January 1 20X0			$		$		$		$
Issuance of stock during 20X1			67,000		234,500				301,500
Net income for 20x1							12,839		12,839
Dividends declared in 20X1							-5,360		-5,360
December 31, 20X1			67,000		234,500		7,479		308,979
Issuance of stock during 20x2
Net income for 20x2							22,106		22,106
Dividends declared 20x2							-4,020		-4,020
December 31,20x2			67,000		234,500		25,565		327,065
Issuance of stock during 20x3
Net income for 20x3							43,159		43,159
Dividend declared 20x3							-12,060		-12,060
December 31,20x3			$67,000		$234,500		$56,664		$358,164

	Alison the Artitect Balance sheet
	As of December 31
	Current Assets				20X1
	Cash				$266,370
	Accounts receivable				16720
	Office supplies				1,170
	Kitchen supplies				260
	Prepaid insurance				2280
	Total current assests				286800
	Fixed assests
	Automobile				34500
	Accumulated depn				-6900
	Net book value				27600
	Computers				1320
	Accumulated depn				-330
	Net book value				990
	Copiers				2910
	Accumulated depn				-582
	Net book value				2328
	Total fixed assests				30918
	Total assests				$317,718
	Current liabilities
	Accounts payable				780
	Taxes payable				5319
	Professional service payable				1300
	Dividend payable				1340
	Total current liabilities				8739
	Owner's equity
	Common stock				$67,000
	Additional paid in capital				$234,500
	Retained earnings				$7,479
	Total owner's equity				$308,979
	Total liabilities and equity				$317,718

Answer 1

particulars 2011 2012 2013

cash flow from operating activities

cash received from customers 111250 169000 201000

cash paid for expenses (96680) (107921) (118190)

tax expenses (3240) (20057) (28772)

prepaid insurance (2280) - -

net cashflow from operating

activities 9050 31701 54038

cash flow from investing activities

cash paid for automobile (34500) - -

office supplies (1170) - -

kitchen supplies (260) - -

copiers (2910) - -

cash flow from investing activities (38840) - -

cash flow from financing activities

issuance of common stock 67000 - -

additional capital 234500 - -

dividend paid (4020) (5360) (12060)

cash flow from financing activities 297480 (5360) (12060)

total increase/decrease in cashflow 267690 26341 41978

opening cash - 267690 294031

TOTAL CASHFLOW 267690 294031 336009

note:-

1. depreciation is a non cash item hence not to be considered in cash flows.

2. in cash paid for expenses the items considered are salary, rent, phone , office supplies , utilities, kitchen supplies and professional services expenses.

3. from 2011 it is assumed and taken as account payable; taxes; dividend payable paid in 2012 and receivables received in 2012 of 2011. the same was reflected in cashflow statements.