Use the data given to develop a Statement of Cash flows for 2007 and calculate c
ID: 2342551 • Letter: U
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 100Explanation / Answer
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
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
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