Assignment : Statement of Cash Flow Problem
Bob Smith founded the Ace Products Company in 2015. Year 2016 proved to be a test of the company's ability to survive. However, sales increased rapidly in 2017 and the firm reported a net income after taxes of $75,000. Depreciation expenses were
$40,000 in 2017. Following are the Ace Products Company's balance sheets for 2016 and 2017.
|
ACE PRODUCTS COMPANY
|
2016
|
2017
|
|
Cash
|
$50,000
|
$20,000
|
|
Accounts Receivables
|
200,000
|
280,000
|
|
Inventories
|
400,000
|
500,000
|
|
Total Current Assets
|
650,000
|
800,000
|
|
Gross Fixed Assets
|
450,000
|
540,000
|
|
Accumulated Depreciation
|
-100,000
|
-140,000
|
|
Net Fixed Assets
|
350,000
|
400,000
|
|
Total Assets
|
$1,000,000
|
$1,200,000
|
|
Accounts Payable
|
$130,000
|
$160,000
|
|
Accruals
|
50,000
|
70,000
|
|
Bank Loan
|
90,000
|
100,000
|
|
Total Current Liabilities
|
270,000
|
330,000
|
|
Long-Term Debt
|
300,000
|
400,000
|
|
Common Stock
|
150,000
|
150,000
|
|
Paid-in-Capital
|
200,000
|
200,000
|
|
Retained Earnings
|
80,000
|
120,000
|
|
Total Liabilities & Equity
|
$1,000,000
|
$1,200,000
|
A. Prepare a formal statement of cash flow for 2017 and identify the major cash inflows and outflows that were generated by the company.
B. What is the firm's cash build or burn for 2017?
C. Prepare a Sources/Uses Statement for 2017.
A. Cash from Operating Activities:
Net from Operating Activities
Cash from Investing Activities:
Net from Investing Activities
Cash from Financing Activities:
Net from Financing Activities
Total net cash increase (decrease)
Cash at beginning of period Total net cash increase (decrease) Cash at end of period
B. Calculate Cash Build or Burn for 2017:
C. Sources/Uses Statement for 2017: