Question

create cash flow statement

Homework Assignment Due by 8 PM on Sunday September 20th on Canvas Comparative Balance Sheets and some additional information for Red Company are given below. All figures in the table below are in millions of dollars. Red reports on a fiscal year ending December 31" 2000 2001 Green Company Balance Shant as of Den 31 Assets Cash 25 20 Accounts Receivable 45 90 Allowance for Bad Debts (15) (20) Merchandize Inventories 160 135 Land 200 225 420 420 Plant and Equipment Accumulated Depreciation (160) (170) Total Assets 675 700 Liabilities and Equity 30 20 Accounts Payable Taxes Payable 0 15 Long term Debt 265 255 Contributed Capital 290 330 Retained Earnings 90 80 Total Liabilities and Equity 675 700 Additional Information 1. Red's net income for calendar year 2001 was S50 million 2. During 2001, Red sold plant and equipment with an original acquisition cost of $50 million at a loss of $10 million 3. Red's depreciation expense for 2001 was $25 million Prepare in good form Red's Cash Flow Statement for 2001

Answer 1

Cash Flow Statement for the Year 2001 Account Operating Activities Net Income 50 Adjustments: Depreciation Expenses 25 Loss on sale of equipment 10 Increase in Account receivable(Net) 70-30 -40 Decrease in Inventory 160-135 Decrease in Account payable 30-20 -10 Increase in tax payable 15 Net Cash Flow from Operating Activities 75 Investing Activities Purchase of equipment -50 Sale of equipment 25 Purchase of land 225-200 -25 Net Cash Flow from Investing Activities -50 25

-10 40 -60 Financing Activities Repayment of long term debt 165-155 Issue of common equiy 330-290 Payment of dividend Net Cash Flow from Financinfg Activities Net Increase in Cash Cash at the Beginning of the period Cash at the End of the Period -30 -5 25 20

ת | 1601 Accumulated Depreciation asset disposal(Balancing figre) 15 Op. Bal Cl. Bal. 170 Depreciation 185 25 185 50 Bal. B/d(opening balance) Purchase( Balancing figure) Equipment 420 Sale 50 Bal. C/d(Closing balance) 470 420 470 Retained earnings 60 Op. Bal 80 Net income Dividend paid (assumed) Cl. Bal 90 50 140 140 Equipment 15 Asset disposal 50 Accumulated depreciation Cash Sale(balancing figure) Loss on sale 50 25 10 50

Note. Net income given is after tax.

a. b. C. $ $ 1684000 1684000 747000 -747000 397000 -397000 34000 -34000 90000 -90000 416000 416000 416000 d. Cash collected from customers Cash paid to suppliers Salaries paid interest paid Income tax paid Net Cash from the above a. to e. Cash flow from operations Cash sale of PPE Dividend paid e. f. bolc 2000 122000

Calculation of Purchase COGS Cl stock less Op.stock Purchase 781000 391000 -340000 832000

Date Account Balance b/d(Op. Bal) sales Account Receivable Amount Date Account 320000 Cash collected(balancing figure) 1615000 Bad debts Balance c/d Cl. Bal. 1935000 Total Amount 1684000 11000 240000 1935000 Total Date Amount Account Cash Paid Balance c/d Cl. Bal. Total Account Payable Amount Date 747000 Op. Bal 187000 934000 Account Balance b/d (Op. Bal) Purchase Total 102000 832000 934000 Date Account Cash Paid Balance c/d Cl. Bal. Total Salary Payable Amount Date 397000 Op. Bal 51000 Account Balance b/d(Op. Bal) Salary Expense Total Amount 68000 380000 448000 448000

Date Amount Income tax Payable Amount Date Account 90000 Op. Bal Balance b/d(Op. Bal) 85000 income tax Expense 175000 Total Account Cash Paid Balance c/d Cl. Bal. Total 77000 98000 175000 Date Account Accumulated Depreciation Amount Date Account 119000 Balance b/d Op. Bal. 476000 Depreciation expense 595000 Total Amount 442000 Asset disposal Balance c/d(Cl. Bal) Total 153000 595000 Date PPE Amount Date 1122000 Account Balance b/d (Op. Bal) Purchase Amount Account Assets disposal 133000 272000 1261000 Balance c/d Cl. Bal. Total Total 1394000 1394000

Too many questions

Date Assts disposal Amount 133000 Account Asset Balance c/d(Cl. Bal) Date Amount 119000 Account Accumulated depreciation Sale of equipment cash Loss on sale Total 2000 12000 133000 Total 133000 Date Account Cash dividend Paid Balance c/d Cl. Bal. Total Amount 340000 Retained earnings Amount Date Account 122000 Op. Bal Balance b/d (Op. Bal) 364000 Net income 486000 Total 146000 486000

Too many questions. I have tried my best to solve as many as possible. If more questions are there please split it . normally 4 questions are answered. Sorry.