Question

Below are the past two years of financials for Field of Dreams, LLC:

INCOME STATEMENT:

	2016	2017
Sales	$100,000.00	$138,600.00
Cost of Goods Sold	$60,000.00	$83,160.00
Gross Margin	$40,000.00	$55,440.00
Depreciation	$16,000.00	$19,200.00
Administrative Costs	$9,000.00	$10,800.00
EBIT	$15,000.00	$25,440.00
Interest	$4,000.00	$4,000.00
Pre-tax income	$11,000.00	$21,440.00
Taxes	$4,400.00	$8,576.00
Net Income	$6,600.00	$12,864.00
Dividends	$0.00	$7,718.40
Addition to Retained Earnings	$6,600.00	$5,145.60

BALANCE SHEET AS OF 12/31/2017:

ASSETS	2016	2017
Cash	$5,000.00	$6,000.00
Inventory	$15,000.00	$18,000.00
Accounts Receivable	$15,000.00	$20,790.00
Current Assets	$35,000.00	$44,790.00
Net PPE	$80,000.00	$92,000.00
Total Assets (TA)	$115,000.00	$136,790.00

LIABILITIES & SHAREHOLDER EQUITY	2016	2017
Accounts Payable	$25,000.00	$30,000.00
Current Liabilities	$25,000.00	$30,000.00
Long Term Debt	$40,000.00	$51,644.40
Total Liabilities	$65,000.00	$81,644.40
Shareholder Equity	$50,000.00	$55,145.60
Total Liabilities and Shareholder Equity	$115,000.00	$136,790.00

What is the net increase in cash and marketable securities for 2017? (Refer to the Statement of Cash Flows)

Answer 1

Field of Dreams, LLC
Statement of Cash Flows
For the year ended December 31, 2017
		Amount ($)
Cash flows from operating activities;
Net Income		12,864
Adjustments to reconcile net income to Net cash provided by operating activities
Depreciation Expenses	19,200
Increase in Merchandise inventories	-3,000
Increase in Accounts Receivables	-5,790
Increase in Accounts Payable	5,000	15,410
Net cash provided by operating activities
Cash flows from investing activities:
Cash payment to purchase of Equipment	-31,200
Net cash used by investing activities [$92,000 + $19,200 - $80,000]		-31,200
Cash flows from financing activities:
Cash payment on long-term Debt	11,644.40
Payment of Dividend	-7,718.40
Net cash provided by financing activities		3,926
Net increase in cash and marketable securities		$1,000

“Therefore, the net increase in cash and marketable securities for 2017 = $1,000”