Question

Use the data given to develop a Statement of Cash flows for 2007 and calculate change in cash from 2006 in operating, investing and financing activities and reconcile to beginning and ending cash.

Income Statements
	(Thousands of Dollars)
	Katie's Construction						Peer
	2006		2007		Proj. 2008		Com. Size
Net Sales	81,950		83,875		101,488.75		100.00
Cost of goods sold	66,000		70,950		85,849.5		81.00
Gross Profit	15,950		12,925		15,639.25		19.00
	0		0		0
S & A Expenses	8,360		9,997.9		11,163.762		10.00
Depreciation	1,100		902		1,045		1.00
Operating Profit	6,490		2,025.1		3,430.488		8.00
	0		0		0
Interest Expense	775.5		1,322.2		1,125.3		1.00
Pre-Tax Profit	5,714.5		702.9		2,305.188		7.00
	0		0		0
Tax (34%)	1,942.93		238.986		783.764		2.38
After Tax profit	3,771.57		463.914		1,521.424		4.62
	0		0		0
Dividends	1,377.2		165		660
Retained Earnings	2,394.37		298.914		861.424
No. of Shares	1,450		1,450		1,450
Stock Price/Share	13		9
	Balance Sheets
	(Thousands of Dollars)
	Katie's Construction						Peer
	2006		2007		Proj. 2008		Com. Size
Cash	1,760		1,427.8		1,760		3.5
Accounts Receivable	8,140		13,200		11,550		28
Inventory	14,609.1		20,900		15,381.3		47
Total Current Assets	24,509.1		35,527.8		28,691.3		78.5
	0		0		0
Net Fixed Assets	6,832.1		7,156.6		8,760.4		21.5
Total Assets	31,341.2		42,684.4		37,451.7		100
	0		0		0
Accounts Payable	4,620		8,800		6,600		15
Notes Payable	2,256.1		8,250		4,290		9
Accruals	2,255		3,242.8		3,567.08		7.5
Total Current Liabilities	9,131.1		20,292.8		14,457.08		31.5
	0		0		0
Long Term Debt	5,380.1		5,262.4		5,148.704		19
Total Liabilities	14,511.2		25,555.2		19,605.784		50.5
	0		0		0
Common Equity	16,830		17,129.2		17,845.916		49.5
Total Liabilities & Equity	31,341.2		42,684.4		37,451.7		100

Answer 1

cash flow statement
Indirect Method
net income		463.91
add depreciation		902.00
changes in working capital
increase in accounts receivables		-5060.00
increase in inventory		-6290.90
increase in accounts payable		4180.00
increase in accruals		987.80
increase in notes payable		5993.90
cash flow from operating activities			1176.714
cash flow from investing activities
purchase of fixed assets	6832.1-(7156.6+902)	-1226.5
cash flow from investing activities			-1226.5
cash flow from financing activities
payment of long term debt		-117.7
dividend paid		-165
cash flow from financing activities			-282.7
net cash flow during the year			-332.486
beginning cash balance			1760
year end cash balance			1427.514
			0.286
Difference in closing balance of cash due to the figure of retained earnings
retained earning given in balance sheet		17129.2
retained earning should be	16830+298.914	17128.914
difference in cash balance due to changed amount of retained earning		0.286