Question

In: Finance

compute the statement of cash flows -- compute the amount of cash from operating activities, cash...

compute the statement of cash flows -- compute the amount of cash from operating activities, cash from investing activities, and cash from financing activities.

INCOME STATEMENT, 2018

REVENUES

$1,000

COGS EXCL. DEPRECIATION

     600

DEPRECIATION

     100

EXPENSES

     200

EBIT

     100

INTEREST

       50

EBT

       50

TAXES @ 40%

       20

NET INCOME

       30

BALANCE SHEETS

12/31/17

12/31/18

CASH                          $100

CASH                            $280

A/R                                  50

A/R                                  100

INVENTORIES             90

INVENTORIES             150

CURRENT ASSETS   240

CURRENT ASSETS      530

GROSS PP&E            1,000

GROSS PP&E              1,000

- ACCUM. DEPRE.      300

- ACCUM. DEPRE         400

NET PP&E                    700

NET PP&E                      600

TOTAL ASSETS          940

TOTAL ASSETS         1,130

A/P                                   40

A/P                                     50

ACCRUALS                   50

ACCRUALS                     50

ST DEBT                         50

ST DEBT                         100

CURRENT LIAB.        140

CURRENT LIAB.          200

LONG TERM DEBT   400

LONG TERM DEBT     500

TOTAL LIAB.              540

TOTAL LIAB                 700

TOTAL EQUITY         400

TOTAL EQUITY           430

TOTAL LIAB.+EQ.     940

TOTAL LIAB.+EQ.    1,130

TOTAL COMMON SH.   200

TOTAL COMMON SH.   200

CURRENT PRICE/SHARE = $10

Solutions

Expert Solution

CASH FLOW STATEMENT

CASH FLOW FROM OPERATING ACTIVITIES

NET PROFIT BEFORE TAX AND INTEREST   100

ADJUSTMENTS FOR

  DEPRECIATION 100

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 200

CHANGES IN WORKING CAPITAL

LESS : INCREASE IN AR    (100-50) (50)

LESS : INCREASE IN INVENTORIES (150-90) (60)

LESS : INCREASE IN CURRENT ASSETS    (530-240) (290)

ADD : INCREASE IN AP     (50-40)    10

ADD : INCREASE IN CURRENT LIABILITIES   (200-40) 160

CASH GENERATED FROM OPERATIONS (30)

TAXES PAID (20)

NET CASH USED IN OPERATING ACTIVITIES A (50)

CASH FLOW FROM INVESTING ACTIVITIES B 0

PROCEEDS FROM SHORT TERM DEBT    50

PROCEEDS FROM LONG TERM DEBT 100

PROCEEDS FROM ISSUE OF EQUITY     30

INTEREST PAID (50)

CASH FLOW FROM FINANCING ACTIVITIES C    130

NET INCREASED IN CASH AND CASH EQUIVALENTS (A+B+C) 80

CASH AND CASH EQUIVALENTS IN THE BEGINNING OF THE PERIOD 100

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 180


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