Question

Darling Corp.: Balance Sheets

For the Years 20X1 und 20X2

	12/31/X2	12/31/X1
Current Assets:
Cash	8’200	15’300
Accounts Receivable	11’300	2’000
Inventory	9’800	11’200
Prepaid Insurance	1’000	1’000
Total Current Assets	30’300	29’500
Long-term Assets:
Fixed Assets	90’800	68’300
Accumulated Depreciation	31’300	26’500
Fixed Assets Net	59’500	41’800
Total Long-term Assets	59’500	41’800
Total Assets	89’800	71’300
Current Liabilities:
Accounts Payable	2’400	6’300
Wages Payable	3’200	2’500
Interest Payable	1’000	600
Taxes Payable	6’800	5’400
Total Current Liabilities	13’400	14’800
Long-term Liabilities: Bonds Payable	31’000	17’000
Total Liabilities	44’400	31’800
Stockholders' Equity:
Common Stock	30’000	30’000
Retained Earnings	15’400	9’500
Total Stockholders' Equity	45’400	39’500
Total Liabilities and Stockholders' Equity	89’800	71’300

Capricorn Inc.: Income Statement

For the Year Ended 31.12.20X2

Income Statement: For the Year Ended December 31, 20x2
Sales		189’500
Cost of Goods Sold		126’400
Gross Profit		63’100
Less Operating Expenses:
Wage Expense	12’500
Supply Expense
Insurance Expense	2’200
Depreciation Expense	4’800
Rent Expense	2’200	21’700
Operating Income		41’400
Interest Expense		23’000
Income before Taxes		18’400
Income Tax Expense		12’500
Net Income		5’900

Show a well structured cash flow statement (CF op, CF inv, CF fin) including total cash flow for Capricorn Inc., for the year ended December 31, 20X2, assuming the company uses the direct method.

Answer 1

Darling Corp.
Statement of Cash Flow
For the Year Ended 12/31/X2
Cash flows from operating activities:				Workings:
Cash inflows:				Calculation :
Cash received from customers	180,200			Cash collected from customers
Cash outflows:				Beginning AR	2,000
Cash paid to the supplier	(128,900)			+ Sales	189,500
Wages expense (12,500 + 2,500 - 3,200)	(11,800)			- Ending AR	(11,300)
Insurance expense (2,200 - 1,000 + 1,000)	(2,200)				180,200
Rent expense	(2,200)
Interest expense (23,000 + 600 - 1,000)	(22,600)			Purchase from suppliers
Income tax expense (12,500 + 5,400 - 6,800)	(11,100)			- Beginning Inventory	(11,200)
Net cash flow from operating activities		1,400		+ Cost of goods sold	126,400
Cash flow from investing activities				+ Ending Inventory	9,800
Purchase of fixed assets		(22,500)			125,000
Cash flow from financing activities
Proceeds from bonds payable		14,000		Cash paid for suppliers
Net increase/decrease in cash		(7,100)		Beginning AP	6,300
Cash at beginning of the period		15,300		+ purchase from suppliers	125,000
Cash at end of the period		8,200		- Ending AP	(2,400)
					128,900