Question

Prepare the 2018 statement of cash flows for Smolira Golf Corp. (A negative answer should be indicated by a minus sign.) Some recent financial statements for Smolira Golf Corp. follow. Assets 2017 2018 Current assets Cash Accounts receivable Inventory $ 34,385 17.801 36,310 SMOLIRA GOLF CORP 2017 and 2018 Balance Sheets Liabilities and Owners' Equity 2018 2017 Current liabilities $ 37,837 Accounts payable $36,722 27.766 Notes payable 19,008 42,632 Other 19,864 $108.235 Total $ 75,594 Long-term debt $115.000 $ 42,582 16,200 24,634 Total $ 88,496 $ 83,416 $145,000 Owners' equity Common stock and paid-in surplus Accumulated retained earings $ 55,000 307 217 $ 55,000 344452 $464,315 $519,633 Net plant and equipment Total $362.217 $399,452 Total assets $ 552,811 $627 868 $627.868 Total liabilities and owners' equity $ 552,811 SMOLIRA GOLF CORP 2018 Income Statement Sales Cost of goods sold Depreciation $506,454 359,328 44,463 Earnings before interest and taxes Interest paid $102,663 19,683 Taxable income Taxes (25%) $ 82,980 20,745 Net income $ 62,235 Dividends $25,000

Answer 1

Solution

Cash flows from operating activities:
Net income	$        62,235
Adjustments to reconcile net income to net cash from operations
Add: depreciation	$           44,463
Less: Increase in accounts receivable	$        (9,965)
Less: Increase in inventory	$           (6,322)
Add: Increase in accounts payable	$         5,860
Add: Increase in other current liabilities	$         4,770
Net cash from Operating Activities	$      101,041
Cash flows from investing activities:
Fixed asset acquisition	$       (99,781)
Net cash from Investing Activities	$       (99,781)
Cash flows from financing activities:
Increase in long term debt	$        30,000
Dividends paid	$       (25,000)
Decrease in notes payable	$           (2,808)
Net cash from Financing Activities	$         2,192
Net change in cash during the year	$             3,452
Add: Beinning cash balance	$           34,385
Ending cash balance	$           37,837