Question

Windswept Woodworks, Inc.
Input Data
(millions of dollars)
		Year 2			Year 1
Accounts payable		436			384
Accounts receivable		1,280			830
Accumulated depreciation		6,746			6,632
Cash & equivalents		224			128
Common stock		1,184			1,120
Cost of goods sold		1,500			n.a.
Depreciation expense		?			n.a.
Common stock dividends paid		?			n.a.
Interest expense		140			n.a.
Inventory		1,014			1,026
Addition to retained earnings		602			n.a.
Long-term debt		812			736
Notes payable		230			380
Gross plant & equipment		10,260			10,000
Retained earnings		3,062			2,476
Sales		3,018			n.a.
Other current liabilities		116			96
Tax rate		34	%		n.a.
Market price per share – year end	$	19.80		$	17.50
Number of shares outstanding		500.00	million		500.00	million

Cash flows from investment activities
Increase in gross plant and equipment	$
Total cash flow from investments	$
Cash flows from financing activities
Increase in long-term debt	$
Increase in common stock
Cash dividends paid to common stockholders
Total cash flow from financing	$
Net change in cash balance	$
Cash balance on December 31, year 2	$

Answer 1

Statement of cash flow
Cash flows from operating activities
Net Income	602.00
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expenses   (6746-6632)	114
Increase in Accounts receivable	-450
decrease in mercandise Inventory	12
Increase in Accounts Payable	52
Increase in other Current Liabilities	20
	-252
Net cash from operating activities	350
Cash flows from investing activities
Increase in Gross Plant & equipment	-260
Net cash used investing activities	(260.00)
Cash flows from financing activities
Increase in long-term debt (812-736)	76
Increase in common stock (1184-1120)	64.00
Decrease in Notes payable	(150.00)
Cash dividends paid to common stockholders	-16.00
3062-(2476+602)
Net cash used financing activitie	(26.00)
Net Increase in cash and cash equivalents	64.00
Cash and cash equivalents at beginning of period	128.00
Ending Balance	214.00