What is the answer to the statement of cash flows? The entire chart and all the

Question

What is the answer to the statement of cash flows? The entire chart and all the answers

Presented below are the 2016 income statement and comparative balance sheets for Santana Industries SANTANA INDUSTRIES Income Statement For the Year Ended December 31, 2016 ($ in thousands) Sales revenue 15,850 Service revenue 5,000 20,850 Total revenue Operating expenses Cost of goods sold Selling General and administrative 8,000 3,200 2,300 13,500 Total operating expenses Operating income Interest expense 7,350 280 Income before income taxes Income tax expense 7,070 3,300 Net income $3,770

Explanation / Answer

Solution:

Santana Industries

Statement of Cash Flows

For the Year Ended December 31, 2016

($ in thousands)

Cash flows from operating activities

Net Income

3770

Adjustments for noncash effects

Depreciation expenses

2,400

Changes in operating assets and liabilities

Increase in accounts receivable ($ 4,100- $ 3,000)

(1,100)

Increase in inventory ($ 5,600- $ 3,800)

(1,800)

Decrease in prepaid rent ($ 230- $ 460)

230

Increase in accounts payable ($ 3,000- $ 1,900)

1,100

Increase in interest payable ($ 180-0)

180

Increase in deferred service revenue ($ 960-$680)

280

Decrease in income taxes payable ($ 630-$960)

(330)

960

Net Cash flows from operating activities

4,730

Cash flows from investing activities

Purchase of equipment (Given)

(5,600)

Sale of equipment (Given)

1,300

Net Cash flows from financing activities

(4,300)

Cash flows from investing activities

Proceeds from loan payable ($ 6,600- $ 0)

6,600

Payment of dividends (Given)

(1,800)

Net Cash flows from financing activities

4,800

Net increase in cash $ 4,730 + ($ 4,300) + $4,800

5,230

Cash January 1

2,920

Cash December 31

$ 8,150

Santana Industries

Statement of Cash Flows

For the Year Ended December 31, 2016

($ in thousands)

Cash flows from operating activities

Net Income

3770

Adjustments for noncash effects

Depreciation expenses

2,400

Changes in operating assets and liabilities

Increase in accounts receivable ($ 4,100- $ 3,000)

(1,100)

Increase in inventory ($ 5,600- $ 3,800)

(1,800)

Decrease in prepaid rent ($ 230- $ 460)

230

Increase in accounts payable ($ 3,000- $ 1,900)

1,100

Increase in interest payable ($ 180-0)

180

Increase in deferred service revenue ($ 960-$680)

280

Decrease in income taxes payable ($ 630-$960)

(330)

960

Net Cash flows from operating activities

4,730

Cash flows from investing activities

Purchase of equipment (Given)

(5,600)

Sale of equipment (Given)

1,300

Net Cash flows from financing activities

(4,300)

Cash flows from investing activities

Proceeds from loan payable ($ 6,600- $ 0)

6,600

Payment of dividends (Given)

(1,800)

Net Cash flows from financing activities

4,800

Net increase in cash $ 4,730 + ($ 4,300) + $4,800

5,230

Cash January 1

2,920

Cash December 31

$ 8,150

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