Question

1) (5 points total) Buffalo Corp's Balance Sheet and Income Statement are provided below, as well as some additional information. Buffalo Corp is a US-based company and reports under US GAAP. 68,000 Balance Sheet on December 31 Assets Cash Accounts Receivable Prepaid Expenses Inventory Long-Term Investments Property and Equipment Less: Accumulated Depreciation 2019 2018 45,000 42,000 65,000 13,000 10,000 63,000 53,000 75,000 60,000 235,000 180,000 80,000 50,000 Net Property and Equipment 155,000 130,000 Goodwill 25,000 25,000 Total Assets 441,000 388,000 Liabilities and Shareholder's Equity Accounts Payable Salaries Payable Interest Payable Long-Term Debt Contributed Capital Retained Earnings Total Liabilities and Shareholders' Equity 22,000 46,000 2,000 194,000 120,000 57,000 21,000 64,000 5,000 154,000 85,000 59,000 441,000 388,000

Answer 1

Net Income		71,400
Add : Adjustment to Net income
Depreciation	30,000
Loss on Sales of Investment	5,000
Decrease in Accounts Receivable	23,000
Increase in Prepaid Expense	(3,000)
Increase in Inventory	(10,000)
Increase in Accounts Payable	1,000
Decrease in Salary Payable	(18,000)
Decrease in Interest Payable	(3,000)	25,000
Net Cash Flow from operating Activities		96,400

Sales of investment =60000+50000-75000

Purchase of Investment	(50,000)
Sales of Investment	35,000
Purchase of Equipment	(55,000)
Net Cash flow from Investing Activities	(70,000)

3

Payments to Suppliers = COGS + Ending inventory - Beginning Inventory + Beginning AP - Ending AP

= =420000+63000-53000+22000-21000 = 431000

4

Opening Retained Earnings = 59000

Closing Retained Earmings = 57000

Net income = 71400

Dividned =57000-71400-59000 = (73400)