question archive Using the information from 22-16, create a cash flow statement for 2016
Using the information from 22-16, create a cash flow statement for 2016
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Using the information from 22-16, create a cash flow statement for 2016. Cash Flow Statement
Bristle Brush-Off Corporation: Income Statements for Years Ended December 31 (5000s) 2016 2015 Sales Cost of goods sold Other expenses Depreciation Earnings before interest and taxes Interest Earnings before taxes Taxes (25%) Net Income $7,950 5,100 350 750 1,750 654 1,096 274 $ 822 $7,000 4,000 500 600 1,300 500 800 200 $ 600 Bristle Brush-Off Corporation: Balance Sheets as at December 31 (5000s) 2016 2015 $ 60 380 1,950 40 $ 40 0 2,140 40 2,760 4.980 7,750 3,430 $4,320 $9,300 2,400 4,830 6,350 2,680 $3,670 $6,500 Assets Cash Short-term investments Accounts receivable Prepaid expenses Inventory Total current assets Gross plant property & cquipment Less: Accumulated depreciation Net plant property de equipment Total assets Liabilities and Equity Accounts payable Notes payable Accruals Total current liabilities Long-term debt Common stock (400,000 shares) Retained camnings Total cquity Total liabilities and equity Stock price WACC $2,890 9013 $2,580 1,050 70 3,700 85 3,878 500 500 3,200 1.722 4,922 $9,300 3,200 1,100 4,300 $8,500 $20 13% $18.70 13%
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Cash flow statement
| (A) Cash flow from operating activities | |
| Profit after tax | 822 |
| Add: tax paid | 274 |
| Profit before tax | 1096 |
| Add: depreciation (non cash expenses) | 750 |
| Add: interest paid (non operating expenses) | 654 |
| Cash flow before Working capital changes | 2500 |
| Add: short term investment | 380 |
| Add: Accounts payable | 310 |
| Add: accrual | 15 |
| Less: Accounts receivables | (190) |
| Less: Inventory | (360) |
| Less: Notes payable | (147) |
| 1854 | |
| Less: tax | (274) |
| Net cash flows from operating activities | 1580 |
| (B)Cash flow from Investing Activities | |
| Acquisition of PPE (WN 1) | (1400) |
| (C) cash flow from Financing activities | |
| Dividend paid (WN 2) | (200) |
| Interest paid | (654) |
| Cash flow used in Financing activities | (854) |
Nat cash (A+B+C) = 2234-1400-854 = (20)
Opening cash and cash equivalents = 60
Closing cash and cash equivalents = 40
WN 1 calculation of acquisition of PPE
| Particulars | Debit | Particulars | Credit |
| To balance brought down | 6350 | ||
| To purchases (B.F) | 1400 | By balance carried down | 7750 |
| 7750 | 7750 | ||
WN 2 - calculation of dividend paid
Balance of opening retained earnings = 1100
Add : profit during the year = 822
Less: balance of closing retained earnings = (1722)
Dividend paid = 200
