Question

Using the below financial statements to complete the ratio analysis and statement of Cash Flow questions following the financial statements.

Milky Way corp comparative Balance sheet December 31, 20XX and 20XX (Prior)

Assets	Current	Prior
Cash	1,580	1,080
Account Receivable	1,300	1,680
Inventory	12,420	12,000
Total Current Assets	15,300	14,760
Land	12,300	10,200
Equipment	11,480	9,600
Accumulated Depreciation	(2,040)	(1,080)
Total Long-term Assets	37,040	33,480
Liabilities
Account Payable	1,920	960
Salaries Payable	5,060	4,080
Total Current Liabilities	6,980	5,040
Long-term Debt	4,300	4,200
Total Liabilities	11,280	9,240
Stockholders' Equity
Common Stock, 1000 Shares	10,000	10,000
Retained Earnings	15,760	14,240
Total Stockholders' Equity	25,760	24,240
Total Liabilities Stockholders' Equity	37,040	33,480

Milky Way Corp Income statement for the year Ended December 31, 20XX

Current year

Sales		24,720
Cost of goods sold		11,600
Gross Profit		13,120
Operating Expense
Depreciation Expense	960
Salaries Expense	3,240
Other Expenses	2,400
Total Operating Expenses		6,600
Operating Income		6,520
Interest Expense		(600)
Net Income		5,920

Prepare the Statement of Cash flows for Milky Corp for 20XX. Use the Indirect method.

Milky Way Corp Statement of cash flow For the year Ended December 31, 20XX

Cash Flows from Operating Activities:

Net Cash inflow from Operating Activities

Cash flows from Investing Activities

Net Cash Outflow from Investing Activities

Cash flows from Financing Activities:

Net Cash from Financing Activities

Net Increase/ Decrease in cash flow

Plus: Beginning Cash Balance

Ending Cash Balance

Answer 1

Working note: