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1. Degree 33 Surfboards is a small company that sells surfboards in Southern California. They have only been in business for two years and provided the following information 2016 $196,619 28,372 55506 12,067 Cost of Goods Sold Cash Depreciation Interest Expense Selling and Administrative38,668 Accounts Pavable Net Fixed Assets Sales Accounts Receivables Notes Payable Long-Term Debt Inventor New Equity Raised 20,143 244,881 385,724 20,104 22,855 123,607 38,706 0 2017 248,263 42,865 62,738 13,831 50,469 34,091 298,350 470,172 26,078 24,955 140,000 52,057 15,000 Degree 33 Surfboards pays out 40% of net income as dividends, and had a 30% tax rate A. Prepare an income statement for 2016 & 2017 B. Prepare a balance sheet for 2016. C. Calculate the Operating Cash Flow (OCF) for 2016 & 2017 D. Calculate Cash Flow from Assets for 2017. E. Calculate Cash Flow to Creditors for 2017. F. Calculate Cash Flow to Stockholders for 2017.

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Answer #1

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A. Preparation of income statement for 2016 & 2017

The Net Income for 2016 : $ 58,005 ; 2017 : $ 66,410

33 Suriboards Income Statement for 2016 and 2017 Paiticulars 2016 2017) 385,724470,172 Sales Less Cost Of goods sold Gross Profit Less 196,619 48,263 189,105221 55,50662,738) 12,067(13,831) reciation Interest Epense 8,668(50,46 82,864 24,85 Selg& admmistration exxpenses Net Proft Less: Tax 30% Net Income 94,871 8461 $ 58,005$66,410

B. Preparation of balance sheet of Degree 33 Surfboards as follows :

33 Suriboards Balance Sheet 2016 2017) ASSETS Cash Accounts Receivable 42,865 26,078 52,057 244,881 298.350 $332,063$419,350 28,372 20,104 38,706 et Fixed assets Assets AND OWNERS EQUITY Accounts Pavable 34,091 24,955 123,607140,000 130,655 145,655 74,649 $332,063$419,350 20,143 22,855 otes Payable termDebt Owners Capital Retamed lLiabilties and Owners Equity Working Notes 1. Calculation of Retamed ear Net Income Less : 40% distibuted as didends Add Retained e 2016 2017 $ 58,005$66,410 26,564) 34,803 $34,803$74,649 3,202 balance

C. Calculation of Operating Cash flow for 2017

( Operating Cash flow of 2016 cannot be calculated as comparitive details of 2015 not given)

Operating Cash flow in 2017 is $ 139,702.

erating Cash Flow for 2017 Paiticulars 2017 S) Net profit from Income Stateent Add: Non cash ependihe 66,410 62,738 13,831 reciation Add: Epensesto be shown under other head Interest exxpenses Changes m workng capita Add Increase n accouwnts pavable 13,948 2,100 (5,974) 13,351) $139,702 Increase n notes pavable Increase m accoumts recevable ss Increase n nnvei et cash flow from activities

D. Calculation of Cash Flow from Assets for 2017

Cash outflow of assets (additions made) is $ 116,207.

Cash Flow fromAssets for 2017 Paiticulars Opening Balance of fixed asset:s Less Depreciation for the year Closing Balance Less : Actual Closng balance of Fixed assets Addtions dring the yearie. cash outflow 244,881 62.73 182,143 $ (116207)

E. Calculation of Cash Flow from Creditors for 2017

Cash out flow (payments made) to Creditors is $ 182,671.

Cash Flow to Creditors for 2017 Particulars Opening Balance (Accounts payable) Add Purchases (Cost of goods sold) 20,143 196,619 216,762 34,091 $182,671 ss Closng balance (Acconts payable Cash flow to creditors

F. Calculation of Cash Flow to Stockholders for 2017

Dividend disributed to stockholders is $ 26,564 i.e, 40 % of Net Income.

Cash flow to stock holders for 2017 Dvidend distributed $26,564

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