Question

Attempt 1 of 1 co ACC 113 Project 1A Stephanie Ram Corporation's Income Statement for the year ended March 31, 2016, and its Comparative Balance Sheets as of March 31, 2016 and 2015 are as follows: Stephanie Ram Corporation Income Statement For the Year Ended March 31, 2016 Sales Cost of goods sold Gross margin Operating expenses $1,926,500 1,431,300 $495,200 Salaries expense $127,000 49,400 271,200 Depreciation expense All other operating expense Total operating expense Income from operations 447,600 47,600 ecincome/(expenses Gain on sale of equipment $6,000 (23,800) (17,800) $29,800 4,600 $25,200 Interest expense Income before income taxes Income taxes expense Net income Stephanie Ram Corporation Comparative Balance Sheets March 31, 2016 and 2015 2016 2015 Assets Cash Accounts receivable (net) Merchandise inventory $201,600 173,600 328,000 4,000 148,000 $55,000 208,000 438,000 3,000 144,000 Q1 Prepaid rent Equipment

Answer 1

Stephanie Ram Corporation
Cash Flow Statement
For year ended March 31 2016
A. Cash Flows from Operating Activity
Net Income		$      25,200.00
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense	$      49,400.00
Gain on sale of Equipment	$      (6,000.00)
Changes in current operating assets and liabilities:
Decrease in Accounts receivables	$      34,400.00
Decrease in Accounts payables	$    (56,000.00)
Decrease in Merchandise Inventory	$    110,000.00
Increase in prepaid Rent	$      (1,000.00)
Increase in income taxes payable	$        4,000.00
		$    134,800.00
Net cash flow from Operating activities		$    160,000.00
B. Cash flows from Investing Activities
Cash received from sale of Equipment	$      12,200.00
Cash paid for purchase of equipment	$    (38,600.00)
Net cash flow used for investing activities		$    (26,400.00)
C. Cash Flows from Financing activities
Payment for notes payable	$    (18,000.00)
Proceeds from notes payable issued	$      36,000.00
Cash paid for dividends	$      (5,000.00)
Cash flows from Financing activities		$      13,000.00
Net Increase (Decrease) in Cash [A+B+C]		$    146,600.00
Cash at the beginning		$      55,000.00
Cash at the end		$    201,600.00

Issue of shares and bond redemption are non cash transactions in the above situation hence are not a part of cash flow statement.

General notes for cash flow

Cash is increased when Current liability increase or Current asset Decrease.

Cash is Decreased when Current liability Decrease or Current asset Increase.

Depreciation or loss on sale of any asset is a non cash expense hence it will be added to net income to get operating cash

Profit on sale of asset or investment is a non cash profit and hence will be deducted from operating income.

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