Question

FINA 3006 Preparing a Statement of Cash Flows Given the balance sheets and the income statement of The Jamin Corporation: a) Prepare the firm's statement of cash flows for the year ended December 31, 2017. Income Statement--The Jamin Corporation for the year Ending December 31, 2017 830,200 Sales 39,750 Cost of Goods Sold Gross profit Operating expenses Selling expenses General and administrative expenses Depreclation Total operating expenses Operating income 290,450 90,750 71,800 28,200 190,150 99,700 20,000 Interest expense Earnings before tax 79,700 17.390 Income tax Net income available to common stockholders $ 62,310 Balance Sheets--The Jamin Corporation December 31, 2016 and 2017 Change 2016 2017 Assets $ 5,000 $ 39,000 44,000 Current assets 7,500 34,400 Cash 70,500 78,000 177,000 211,400 Accounts Receivable $ 13.800 13.500 300 Inventories $ 300,000 $ 47,200 347,200 Other current assets Total current assets Fixed assets $ 838,000 (383,200) $ 454,800 $79,000 (28,200) $ 50,800 $759,000 (355,000) 404,000 70,000 $ 474,000 Gross plant and equipment Accumulated depreciation Net plant and equipment 70,000 Land $524,800 $ 50,800 Total fixed assets 30,000 55,000 Patents 25,000 $ 927,000 $ 804,000 $ 123,000 Total assets Liabilitles and Equity $ $ 76,110 Current liabilities 60,810 $15,300 Accounts payable Income tax payable Accrued wages and salaries Interest payable Total current liabilities 12,000 3,400 2,000 17,390 3,900 2,500 $ 99,900 200,000 $299,900 5,390 500 500 $ 78,210 $ 21,690 146,000 224,210 54,000 Lon-term notes payable Common stock (par value and paid in capital) Retained earnings Total stockholders' equity Total liabilities and equity $ 75,690 $300,000 327,100 $627,100 $300,000 $ 10 279,7 $579,790 $ 804,000 47,310 $ 47,310 $123,000 $927,000

Answer 1

		Statement of cash flows			$
	Cash flow from operating activities:
	Net income				62310
	Adjustments:
	Depreciation expense				28200
	Increase in accounts receivable				-7500
	Increase in inventories				-34400
	Increase in other current assets				-300
	Increase in accounts payable				15300
	Increase in income taxes payable				5390
	Increase in accrued wages and salaries				500
	Increase in interest payable				500
	Cash flow from operating activities (A)				70000
	Cash flow from investing activities:
	Purchase of Plant and equipment				-79000
	Purchase of patent				-25000
	Cash used in investing activities (B)				-104000
	Cash flow from financing activities:
	Issue of long-term notes				54000
	Dividend paid		(Note:1)		-15000
	Cash flow from financing activities ©				39000
	Net increase in cash (A)+(B)+©				5000
	Add:Beginning balance of cash				39000
	Ending balance of cash				44000
	Note:1
	Analyze retained earnings
					$
	Beginning balance				279790
	Add: Net income				62310
					342100
	Less: Ending balance				327100
	Dividend paid				15000
	Increase in current assets result in cash outflow
	Decrease in current assets result in cash inflow
	Increase in current liabilities result in cash inflow
	Decrease in current liabilities result in cash outflow