Instructions: 1] Please use the Balance Sheet to determine the difference 2] Usi
ID: 2729447 • Letter: I
Question
Instructions:
1] Please use the Balance Sheet to determine the difference
2] Using the indirect method to transfer the difference with numbers to each activity (Do not use the other symbol, must number)
3] Using the indirect method to create a new Statement of Cash Flow, sum up each activity and provide the brief explanation.
4] Please provide the clear and readable calculation.
5] Company has net income $100,000.
BALANCE SHEET
For The Year Ended December 31, 2008 & 2009
2009
2008
Difference
Operating
Investing
Financing
Assets
Current assets
Cash and cash equivalents
$ 410
$ 217
Accounts and other receivables
204
175
Merchandise inventories
1,902
2,464
Prepaid expenses and other current assets
81
51
Total current assets
2,597
2,907
Non-current assets
Property and equipment
Real Estate, net
2,354
2,435
Other, net
1,872
1,777
Total property and euqipment
4,226
4,212
Goodwill, net
347
356
Other assets
729
491
Total assets
$ 7,899
$ 7,966
Liabilities
Current Liabilities
Short-term borrowings
156
134
Account payable
1,415
1,280
Accrued expenses and other current liabilities
696
680
Income taxes payable
224
231
Total current liabilities
2,491
2,325
Non-current liabilities
Long-term debt
1,222
851
Deferred income debt
333
219
Other liabilities
229
140
Total non-current liabilities
1,784
1,210
Total liabilities
$ 4,275
$ 3,535
Stockholders' Equity
Common stock
$ 30
$ 30
Additional paid-in capital
459
467
Retained earnings
4,478
4,610
Foreign Currency translation adjustments
(100)
(122)
Treasury shares, at cost
(1,243)
(557)
Total stockholders' equity
$ 3,624
$ 4,428
Total liabilities and stockholders' equity
$ 7,899
$ 7,963
Instructions:
1] Please use the Balance Sheet to determine the difference
2] Using the indirect method to transfer the difference with numbers to each activity (Do not use the other symbol, must number)
3] Using the indirect method to create a new Statement of Cash Flow, sum up each activity and provide the brief explanation.
4] Please provide the clear and readable calculation.
5] Company has net income $100,000.
Explanation / Answer
Statement of cash flows using the indirect method:
Particulars
Amount
Cash from operating Activities
Net Income
$100
Add: Depreciation
Interest Paid
Income Tax Expense
Goodwill written off (356-347)
224
9
Less: Gain on Sale of Plant Assets
Cash Operating activities before working capital adjustments, and taxes
333
Working Capital Adjustments
Add: Increase in Accounts Payable (1415-1280)
Increase in Short term borrowings (156-134)
Increase in accrued expenses and other current liabilities (696-680)
Decrease in Inventories (2464-1902)
135
22
16
562
Less: Increase in Accounts Receivable (204-175)
Increase in Prepaid expenses and other current assets (81-51)
29
30
Cash from operating activities before taxes
1009
Less: Taxes
231
Cash from operating activities
778
Cash from investing activities
Add: Sale of Real Estate (2435-2354)
Sale of Investments
81
Less: Purchase of Other Property & Equipment (1872 - 1777)
Increase in other assets (729-491)
95
238
Cash from Investing Activities
-252
Cash from financing Activities
Add: Loan Raised (1222-851)
Deferred Income Debt (333-219)
Increase in other debts (229-140)
Decrease in Foreign Currency adjustments (122-100)
371
114
89
22
Less: Decrease in Additional Paid in Capital (467-459)
Decrease in retained earnings (4610-4478)
Increase in treasury stock (1243-557)
8
132
686
Cash from financing activities
-230
Net Increase / decrease in cash
296
Opening Cash Balance
$217
Closing Cash Balance
$410
Particulars
Amount
Cash from operating Activities
Net Income
$100
Add: Depreciation
Interest Paid
Income Tax Expense
Goodwill written off (356-347)
224
9
Less: Gain on Sale of Plant Assets
Cash Operating activities before working capital adjustments, and taxes
333
Working Capital Adjustments
Add: Increase in Accounts Payable (1415-1280)
Increase in Short term borrowings (156-134)
Increase in accrued expenses and other current liabilities (696-680)
Decrease in Inventories (2464-1902)
135
22
16
562
Less: Increase in Accounts Receivable (204-175)
Increase in Prepaid expenses and other current assets (81-51)
29
30
Cash from operating activities before taxes
1009
Less: Taxes
231
Cash from operating activities
778
Cash from investing activities
Add: Sale of Real Estate (2435-2354)
Sale of Investments
81
Less: Purchase of Other Property & Equipment (1872 - 1777)
Increase in other assets (729-491)
95
238
Cash from Investing Activities
-252
Cash from financing Activities
Add: Loan Raised (1222-851)
Deferred Income Debt (333-219)
Increase in other debts (229-140)
Decrease in Foreign Currency adjustments (122-100)
371
114
89
22
Less: Decrease in Additional Paid in Capital (467-459)
Decrease in retained earnings (4610-4478)
Increase in treasury stock (1243-557)
8
132
686
Cash from financing activities
-230
Net Increase / decrease in cash
296
Opening Cash Balance
$217
Closing Cash Balance
$410