Question

Using the income statement and balance sheets shown above, create an appropriate cash flow statement including the required disclosures. Thank you.

(Dollars in Millions) 2017 2016 $1,074 3,795 378 5,247 8,103 224 $13, 574 $707 4,038 331 5,076 8, 308 222 $13, 606 $1,507 1,200 24 112 $1,251 1,180 26 130 Assets Current assets: Cash and cash equivalents Merchandise inventories Prepaid expenses Total current assets Property and equipment, net Other assets Total assets Liabilities and Shareholders Equity Current liabilities: Accounts payable Accrued liabilities Interest Payable Income taxes yabl Current portion of capital lease and financing obligations Total current liabilities Long-term debt Capital lease and financing obligations Deferred income taxes Other long-term liabilities Shareholders equity: Common stock - 371 and 370 million shares Paid-in capital Treasury stock, at cost, 197 and 184 million Retained earnings Total shareholders equity Total liabilities and shareholders equity 134 127 All current portion paid 2,974 2,792 1,655 272 701 2,714 2,792 1,789 257 Belongs in operations 563 4 2,944 3,003 (10,338) 12,508 5,177 $13,574 (9,769) 12,312 5,491 $13,606 2017 $18,686 11,944 6,742 (Dollars in Millions, Except per Share Data) Net sales Cost of merchandise sold Gross margin Operating expenses: Selling, general and administrative Depreciation and amortization Impairment Operating income Interest expense 4,435 938 186 1,183 292 Sold assets with net book value of 35 for 19 in cash Loss on sale Income before income taxes Provision for income taxes Net income 16 875 319 $556

Answer 1

A. Cash Flow From Operating Activities	Amount($)	Amount($)
Net Profit Before Taxes		875
Add: Non Cash and Non Operating Expenses
Depreciation and Amortisation	938
Impairment	186
Interest Expense	292
Loss on sale of asset	16	1432
Net Operating cash flow before taxes		2307
Less: Taxes Paid (W.N.1)		-322
Current tax & deferred Taxes
Cash flow from Operating Activities before working Capital Changes		1985
Working Capital Changes
Decrease in Current Assets	194
Increase in current Liabilities	421
Net Working Capital Changes		615
Net Cash Flow from Operating activities		2600
B. Cash Flow from Investing Activities
Purchase of property , plant & Equipment	-954
Sale of PPE	19
Investment in Stock	-569
Net Cash Flow from Investing Activities		-1504
C. Cash Flow from Financing Activities
Issue of Share Capital	59
Interest Paid	-294
Payment of lease obligation	-134
Distributing of Dividend	-360
		-729
Net Cash Flow		367
Add: Opening Cash & Cash equivalent		707
Closing Cash & Cash Equivalent		1074

A. Cash Flow From Operating Activities	Amount($)	Amount($)
Net Profit Before Taxes		875
Add: Non Cash and Non Operating Expenses
Depreciation and Amortisation	938
Impairment	186
Interest Expense	292
Loss on sale of asset	16	1432
Net Operating cash flow before taxes		2307
Less: Taxes Paid (W.N.1) Current tax & deferred Taxes		(322)
Cash flow from Operating Activities before working Capital Changes		1985
Working Capital Changes
Decrease in Current Assets	194
Increase in current Liabilities	421
Net Working Capital Changes		615
Net Cash Flow from Operating activities		2600
B. Cash Flow from Investing Activities
Purchase of property , plant & Equipment	(954)
Sale of PPE	19
Investment in Stock	(569)
Net Cash Flow from Investing Activities		(1504)
C. Cash Flow from Financing Activities
Issue of Share Capital	59
Interest Paid	(294)
Distributing of Dividend	(360)
Payment of lease	(134)
		(729)
Net Cash Flow		367
Add: Opening Cash & Cash equivalent		707
Closing Cash & Cash Equivalent		1074

Taxes Paid

Income tax	Deferred tax
Opening 130	257	387
Expense ;319		319
Balance:449	257	706
Closing 112	272	384
Paid 337	-15	322

Working Capital Changes

Current Assets

Change in Inventory 243

Change in Prepaid (47)

Change in other asset (2)

Total change 194

Current Liabilities

Change in accounts payable 256

Accrues liabilities 20

Lease obligation - current 7

Long term liab -138

Total Change - 421