Question

14. The Fitzgerald Partnership balance sheets for September 30, 2003, and September 30, 2004, are shown below in summary format: Current assets Fixed assets, net September 30 2004 2003 $ 762,000 $ 812,000 9 86,000 986,000 $1,748,000 $1,798,000 $ 532,000 $ 468,000 180,000 360.000 1,036,000 970,000 $1,748,000 $1,798,000 Current liabilities Long-term debt Partnership capital Construct a cash flow statement in as much detail as you can for the year ended September 30, 2004, assuming the following: no new investment in cash was made by the partners; half of the partnership's net income was paid out to the partners; $10,000 of fixed assets were sold, and $135,000 of new fixed assets were acquired.

Answer 1

X for Net Income C D E FITZGERALD PARTNERSHIP Statement of Cash flows for the year ended September 30, 2004 Cash flow from operating activities: Net Income $ 132,000 adjustements to reconcile net income to net cash provided by operating activities: depreciation $ 125,000 change in current operating assets and liabilities decrease in current assets $ 50,000 increase in current liabilities $ 64,000 Net Cash flow from operating activities $ 371,000 Cash flow from investing activities: cash used for purchase of fixed assets cash received for sale of fixed assets Net Cash flow from investing activities $ 135,000 $ 10,000 -$ 125,000 Cash flow from financing activities: distribution made to partners repayment of long term debt Net Cash flow from financing activities -$ 66,000 $ 180,000 $ 246,000 Net Cash flow from all activities $0

working notes debit beginning balance purchase of fixed assets fixed assets (net) A/C credit $986,000 sale of fixed assets $ 10,000 $ 135,000 depreciation for current year (balancing figure) || $ 125,000 ending balance $986,000 net income = ($1,036,000-$970,000)*2 = $132,000 | distribution made to partners = $132,000 / 2 = $66,000 1

for formulas and calculations, refer to the image below -

B6 X Fox Net Income FITZGERALD PARTNERSHIP Statement of Cash flows for the year ended September 30, 2004 Cash flow from operating activities: Net Income =(1036000-970000)*2 adjustements to reconcile net income to net cash provided by operating activities: depreciation =135000-10000 change in current operating assets and liabilities decrease in current assets =812000-762000 increase in current liabilities =532000-468000 Net Cash flow from operating activities =SUM(C6:011) Cash flow from investing activities: cash used for purchase of fixed assets cash received for sale of fixed assets Net Cash flow from investing activities -135000 10000 =SUM(C15:C16) Cash flow from financing activities: distribution made to partners repayment of long term debt Net Cash flow from financing activities --132000/2 =180000-360000 =C20+C21 Net Cash flow from all activities =D12+D17+D22

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