Question

  prepares a “Statement of Cash Flows” for the year ended December 31, 2018.

                                             

                                                Keith corporation balance sheet

                                                                                            December 31

Assets                                                                                 2003        2002

Cash                                                                                 $1,500       $1,000

Marketable securities                                                     1,800         1,200

Accounts receivable                                                        2,000         1,800

Inventories                                                                        2,900         2,800

       Total current assets                                                 $8,200      $6,800

Gross fixed assets                                                           $29,500    $28,100

Less: Accumulated depreciation                                    14,700       13,100

Net fixed assets                                                                 $14,800     $15,000

Total Assets                                                                        $23,000     $21,000                                                                 

Liabilities and Stockholders’ Equity

Accounts payable                                                           $1,600       $1,500

Notes payable                                                                    2,800         2,200

Accruals                                                                                 200             300

        Total current liabilities                                             $4,600       $4,000

Long -term debt                                                                $5,000       $5,000

Common stock                                                                  $10,000     $10,000

Retained earnings                                                                3,400         2,800

       Total stockholders’ equity                                       $13,400     $12,800
Total Liabilities and stockholders” equity                    $23,000     $21,800

Income Statement Data(2003)

Depreciation expense                                                   $1,600

Earning before interest taxes                                        2,700

Taxes                                                                                     933

Net profits after taxes                                                    1,400

Answer 1

Statement of cash flow
Particulars		Amount	Amount
Net income		1,400
Adjustments to reconcile net income:
Depreciation		1,600
Working capital changes:
(Increase in) Marketable securities		(600)
(Increase in) Accounts receivable		(200)
(Increase in) Inventory		(100)
		-
		-
Increase in Accounts payable		100
(Decrease in) Accruals		(100)
Increase in Notes payable		600
Net cash from operating activities		2,700	2,700
Cash flow from investing activities:
(Cash used in purchase of) Property plant and equipment		(1,400)
		-
Net cash (used in) investing activities		(1,400)	(1,400)
Cash flow from financing activities:
(Cash paid) for dividends		(800)
		-
		-
		-
Net cash (used in) financing activities		(800)	(800)
Net change in cash			500
Add: Opening cash balance			1,000
Closing cash and cash equivalents			1,500

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