Question

Excel Online Structured Activity: Statement of cash flows You have just been hired as a financial analyst for Barrington Industries. Unfortunately, company headquarters (where all of the firm's records are kept) has been destroyed by fire. So, your first job will be to recreate the firm's cash flow statement for the year just ended. The firm had $100,000 in the bank at the end of the prior year, and its working capital accounts except cash remained constant during the year. It earned $5 million in net income during the year but paid $700,000 in dividends to common shareholders. Throughout the year, the firm purchased $5.4 million of machinery that was needed for a new project. You have just spoken to the firm's accountants and learned that annual depreciation s $450,000; however, the purchase price for the machinery represents additions to property, plant, and equipment before depreciation. Finally, you have long-term debt of $1 million at a 7% interest rate. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. X Open spreadsheet What was the firm's end-of-year cash balance? Recreate the firm's cash flow statement to arrive at your answer. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar, if necessary.

Answer 1

	1	Operating Activities
	A	Net Income	$5,000,000
	B	Depreciation Expense	$450,000
	C	Change in net working Capital except cash	$0
	D=A+B+C	Net Cash Provided by/(Used in)Operations	$5,450,000
	II	Long -Term Investing activities
	E	Addition to property,Plant,Equip	$5,400,000
	F	Net Cash used in investing activities	$5,400,000
	III	Financing Activities
	G	Increase in long term debt	$1,000,000
	H	Payment of common dividend	($700,000)
	I=G+H	Net Cash provided by financing activity	$300,000
	IV	Summary
		Net Increase/(Decrease) in Cash	$350,000	(5450000-5400000+300000)
		Cash at the beginning of the year	$100,000
		Cash at the End of the year	$450,000
		YEAR END CASH BALANCE	$450,000