Question

VALIUM’S MEDICAL SUPPLY CORPORATION Balance Sheet as of December 31, 2018 and 2017 (in thousands of dollars) Assets 2018 2017 Liabilities and Equity 2018 2017 Current assets: Current liabilities: Cash and marketable securities $ 90 $ 89 Accrued wages and taxes $ 66 $ 59 Accounts receivable 208 199 Accounts payable 168 159 Inventory 330 309 Notes payable 149 149 Total $ 628 $ 597 Total $ 383 $ 367 Fixed assets: Long-term debt $ 656 $ 592 Gross plant and equipment $ 1,127 $ 918 Stockholders’ equity: Less: Accumulated depreciation 182 131 Preferred stock (6 thousand shares) $ 6 $ 6 Net plant and equipment $ 945 $ 787 Common stock and paid-in surplus (100 thousand shares) 120 120 Other long-term assets 170 170 Retained earnings 578 469 Total $ 1,115 $ 957 Total $ 704 $ 595 Total assets $ 1,743 $ 1,554 Total liabilities and equity $ 1,743 $ 1,554 VALIUM’S MEDICAL SUPPLY CORPORATION Income Statement for Years Ending December 31, 2018 and 2017 (in thousands of dollars) 2018 2017 Net sales $ 928 $ 838 Less: Cost of goods sold 407 370 Gross profits $ 521 $ 468 Less: Other operating expenses 65 59 Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 456 $ 409 Less: Accumulated depreciation 51 49 Earnings before interest and taxes (EBIT) $ 405 $ 360 Less: Interest 66 60 Earnings before taxes (EBT) $ 339 $ 300 Less: Taxes 149 129 Net income $ 190 $ 171 Less: Preferred stock dividends $ 6 $ 6 Net income available to common stockholders $ 184 $ 165 Less: Common stock dividends 75 75 Addition to retained earnings $ 109 $ 90 Per (common) share data: Earnings per share (EPS) $ 1.84 $ 1.65 Dividends per share (DPS) $ 0.75 $ 0.75 Book value per share (BVPS) $ 6.98 $ 5.89 Market value (price) per share (MVPS) $ 8.01 $ 6.37 Prepare a statement of cash flows for Valium’s Medical Supply Corporation. (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.) VALIUM’S MEDICAL SUPPLY CORPORATION Balance Sheet as of December 31, 2018 and 2017 (in thousands of dollars) Assets 2018 2017 Liabilities and Equity 2018 2017 Current assets: Current liabilities: Cash and marketable securities $ 90 $ 89 Accrued wages and taxes $ 66 $ 59 Accounts receivable 208 199 Accounts payable 168 159 Inventory 330 309 Notes payable 149 149 Total $ 628 $ 597 Total $ 383 $ 367 Fixed assets: Long-term debt $ 656 $ 592 Gross plant and equipment $ 1,127 $ 918 Stockholders’ equity: Less: Accumulated depreciation 182 131 Preferred stock (6 thousand shares) $ 6 $ 6 Net plant and equipment $ 945 $ 787 Common stock and paid-in surplus (100 thousand shares) 120 120 Other long-term assets 170 170 Retained earnings 578 469 Total $ 1,115 $ 957 Total $ 704 $ 595 Total assets $ 1,743 $ 1,554 Total liabilities and equity $ 1,743 $ 1,554 VALIUM’S MEDICAL SUPPLY CORPORATION Income Statement for Years Ending December 31, 2018 and 2017 (in thousands of dollars) 2018 2017 Net sales $ 928 $ 838 Less: Cost of goods sold 407 370 Gross profits $ 521 $ 468 Less: Other operating expenses 65 59 Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 456 $ 409 Less: Accumulated depreciation 51 49 Earnings before interest and taxes (EBIT) $ 405 $ 360 Less: Interest 66 60 Earnings before taxes (EBT) $ 339 $ 300 Less: Taxes 149 129 Net income $ 190 $ 171 Less: Preferred stock dividends $ 6 $ 6 Net income available to common stockholders $ 184 $ 165 Less: Common stock dividends 75 75 Addition to retained earnings $ 109 $ 90 Per (common) share data: Earnings per share (EPS) $ 1.84 $ 1.65 Dividends per share (DPS) $ 0.75 $ 0.75 Book value per share (BVPS) $ 6.98 $ 5.89 Market value (price) per share (MVPS) $ 8.01 $ 6.37 Prepare a statement of cash flows for Valium’s Medical Supply Corporation. (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.) VALIUM’S MEDICAL SUPPLY CORPORATION Balance Sheet as of December 31, 2018 and 2017 (in thousands of dollars) Assets 2018 2017 Liabilities and Equity 2018 2017 Current assets: Current liabilities: Cash and marketable securities $ 90 $ 89 Accrued wages and taxes $ 66 $ 59 Accounts receivable 208 199 Accounts payable 168 159 Inventory 330 309 Notes payable 149 149 Total $ 628 $ 597 Total $ 383 $ 367 Fixed assets: Long-term debt $ 656 $ 592 Gross plant and equipment $ 1,127 $ 918 Stockholders’ equity: Less: Accumulated depreciation 182 131 Preferred stock (6 thousand shares) $ 6 $ 6 Net plant and equipment $ 945 $ 787 Common stock and paid-in surplus (100 thousand shares) 120 120 Other long-term assets 170 170 Retained earnings 578 469 Total $ 1,115 $ 957 Total $ 704 $ 595 Total assets $ 1,743 $ 1,554 Total liabilities and equity $ 1,743 $ 1,554 VALIUM’S MEDICAL SUPPLY CORPORATION Income Statement for Years Ending December 31, 2018 and 2017 (in thousands of dollars) 2018 2017 Net sales $ 928 $ 838 Less: Cost of goods sold 407 370 Gross profits $ 521 $ 468 Less: Other operating expenses 65 59 Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 456 $ 409 Less: Accumulated depreciation 51 49 Earnings before interest and taxes (EBIT) $ 405 $ 360 Less: Interest 66 60 Earnings before taxes (EBT) $ 339 $ 300 Less: Taxes 149 129 Net income $ 190 $ 171 Less: Preferred stock dividends $ 6 $ 6 Net income available to common stockholders $ 184 $ 165 Less: Common stock dividends 75 75 Addition to retained earnings $ 109 $ 90 Per (common) share data: Earnings per share (EPS) $ 1.84 $ 1.65 Dividends per share (DPS) $ 0.75 $ 0.75 Book value per share (BVPS) $ 6.98 $ 5.89 Market value (price) per share (MVPS) $ 8.01 $ 6.37 Prepare a statement of cash flows for Valium’s Medical Supply Corporation. (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Statement of Cash Flows for Year Ending December 31, 2018
	(in thousands of dollars)
A. Cash flows from operating activities
Net income	$     190.00
Additions (sources of cash):
Depreciation	$       51.00
Increase in accrued wages and taxes	$         7.00
Increase in accounts payable	$         9.00
Subtractions (uses of cash):
Increase in accounts receivable	$       (9.00)
Increase in inventory	$     (21.00)
Net cash flow from operating activities:		$     227.00
B. Cash flows from investing activities
Subtractions:
Increase in fixed assets	$   (209.00)
Increase in other long-term assets	$            -
Net cash flow from investing activities:		$   (209.00)
C. Cash flows from financing activities
Additions:
Increase in notes payable	$            -
Increase in long-term debt	$       64.00
Increase in common and preferred stock	$            -
Subtractions:
Preferred stock dividends	$       (6.00)
Common stock dividends	$     (75.00)
Net cash flow from financing activities:		$     (17.00)
D. Net change in cash and marketable securities		$         1.00

1 Use the balance sheet and income statement below: 2 VALIUM'S MEDICAL SUPPLY CORPORATION 3 Balance Sheet as of December 31, 2018 and 2017 4 (in thousands of dollars) 2018 2017 2015 2014 89 66 59 9 10 6 Assets 7 Current assets: Cash and marketable securities Accounts receivable Inventory Total Fixed assets: 13 Gross plant and equipment Less: Depreciation 90 208 330 628 199 309 597 168 149 383 656 159 149 367 592 Liabilities and Equity Current liabilities: Accrued wages and taxes Accounts payable Notes payable Total Long-term debt: Stockholders' equity: Preferred stock (6 thousand shares) Common stock and paid-in surplus (100 thousand shares) Retained earnings Total Total liabilities and equity 1127 182 918 131 14 6 120 120 16 Net plant and equipment Other long-term assets Total Total assets 945 170 1115 1743 787 170 957 1554 18 19 578 704 1743 469 595 1554 2017 838 370 2018 928 407 521 65 456 468 59 409 21 VALIUM'S MEDICAL SUPPLY CORPORATION 22 Income Statement for Years Ending December 31, 2018 and 2017 23 (in thousands of dollars) 24 25 Net sales 26 Less: Cost of goods sold 27 Gross profits 28 Less: Other operating expenses 29 Earnings before interest, taxes, depreciation, 30 and amortization (EBITDA) 31 Less: Depreciation 32 Earnings before interest and taxes (EBIT) 33 Less: Interest 34 Earnings before taxes (EBT) 35 Less: Taxes 36 Net income 37 Less: Preferred stock dividends 38 Net income available to common stockholders 39 Less: Common stock dividends 40 Addition to retained earnings 41 Per (common) share data: 51 405 66 339 149 190 6 184 75 109 49 360 60 300 129 171 6 165 75 90


42 2 Earnings per share (EPS) Dividends per share (DPS) Book value per share (BVPS) Market value (price) per share (MVPS) 1.84 0.75 6.98 8.01 44 45 0.75 5.89 6.37 46 47 Statement of Cash Flows for Year Ending December 31, 2018 48 (in thousands of dollars) =B36 49 A. Cash flows from operating activities 50 Net income 51 Additions (sources of cash): 52 Depreciation 53 Increase in accrued wages and taxes 54 Increase in accounts payable 55 Subtractions (uses of cash): 56 Increase in accounts receivable 57 Increase in inventory 58 Net cash flow from operating activities: =B31 =F8-G8 =F9-G9 =C9-B9 =C10-B10 =SUM(B50:357) =C13-B13 =C17-B17 =B62+363 60 B. Cash flows from investing activities 61 Subtractions: 62 Increase in fixed assets 63 Increase in other long-term assets 64 Net cash flow from investing activities: 65 66 C. Cash flows from financing activities 67 Additions: 68 Increase in notes payable 69 Increase in long-term debt 70 Increase in common and preferred stock 71 Subtractions: 72 Preferred stock dividends 73 Common stock dividends 74 Net cash flow from financing activities: 75 D. Net change in cash and marketable securities =F10-G10 =F12-G12 =(F14+F15)-(G14+G15) =-B37 =B39 =SUM(B68:B73) =C58+C64+C74 76