Question

Dansko Integrated had Net Income for 2019 of $7,800,000.

The firm invested $4,000,000 in manufacturing equipment during 2019.
The equipment is being depreciated over five years using straight-line depreciation, starting in 2019.

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

Solution:
	Statement of Cash Flows - Indirect Approach
		Amount in $	Amount in $
	Net Cash flows from operating activities
	Net income		$     78,00,000
	Adjustments for reconcile the net income to:
	Depreciation Expenses	$           8,00,000
			$       8,00,000
	Net cash from operating activities		$     86,00,000
	Cash flows from Financing activities
	Purchase of Equipment	$       -40,00,000
	Net cash used in financing activities		$   -40,00,000
	Net Cash Available		$     46,00,000
	Working Notes:
	CALCULATION OF THE DEPRECIATION AS PER STRAIGHT LINE METHOD FOR MACHINE
	Purchase Cost of Machine	$        40,00,000
	Less: Salvage Value	$                        -
	Net Value for Depreciation (A)	$        40,00,000
	Usefule life of the Assets(B)	5	Years
	Depreciation per year = (A/B)	8,00,000
	Total Depreciation Per year =	$           8,00,000