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Prepare Statements of Cash Flow for W&B for (1) 2017 forecast and (2) actual 2017 results (You can use the format provided and discussed in class. Pay attention to the footnotes.) Next to each item provide an explanation for deviation between actual and forecast. 1.
Exhibit 1: Balance Sheets as of December 31 Forecast 2017 $40,000 228,000 300,000 $568,000 Actual 2017 $42,700 278,200 ASSETS Cash Receivables, net Inventory* Actual 2016 $83,700 198,100 265 300 $547,100 Current Assets 825,500 148,500 17,000 131,500 12.300 $969,300 Fixed assets 117,500** 16,500)9 $101,000 12,000 $681,000 72,500 Less: Reserve for depreciation31500 Net fixed assets Deferred charges TOTAL ASSETS $41,000 10.000 $598,100 $34,000 5,000 47,000 Accounts payable Miscellaneous accruals Accrued income tax due Bank loan, current $34,600 7,100 32,400 $213,500 11,900 49,200**s Current Liabilities $74,100 $86,000 314,600 Bank Loan Capital stock (par $50) Retained earnings 180,000 344.000 $598,100 180,000 387000 $653,000 80,000 180,000 394.700 $969,300 TOTAL LIABILITIES &EQUITY Funds needed $28,000 $120,000 *Inventory accounted for on a FIFO basis. **After planned write-off of fully depreciated equipment and fixtures originally costing $20,000. ** Payable in March, 2018.
Exhibit 2: Income Statements for Years Ended December 31 Net sales Cost of sales Gross margin Actual 2016 $1,555,800 (1.012.500) 543,300 Forecast 2017 $1,873,000 (1183.000) 690,000 Actual 2017 $2,540,600 (1.685.200) 855,400 (434800) 108,500 (522.000) 168,000 (670,400) 185,000 st Operating profit Federal income tax Net profit after tax (52.000) 56,500 (89,300) 95,700 88,000 (45,000) S 43,000 (45,000) $ 50,700 Dividends paid (30,000) Eamings retained S 26,500 2016 were $1,052,000; they were estimated at $1,217,000 for 2017 and w * Includes depreciation of $2,600 in 2016, $5,000 estimated for 2017, S5,500 for actual 2017 *Purchases $1,924,500 for 2017. Credit terms were net 10
Statement of Cash Flow 2017 Forecast 2017 Actual Net Income Depreciation Working capital Receivables Inventory Accounts payable Accruals Prov Income Tax Cash Flow from Operationa 3 Fixed Assets 4 Deferred Charges 5 Cash Flow from Investments 6 7 Bank Loan 8 Dividend 9 Cash Flow from Financing 0 1 Total Cash Flow 2 3 Beginning Cash 4 Ending cash 5 Change in Cash 26 27 CF Operationa + Investments Financing in
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Cashflows of W&B
Particulars 2017 2017
Forecast Actuals
Net income 88000 95700
Depreciation 5000 5500
Working capital
Receivables -29900 -80100
Inventory -34700 -239300
Accounts payable -600 178900
Accruals -2100 4800
Prov income tax 14600 16800
Cash flow from operations 40300 -17700
Fixed Assets -65000 -96000
Deferred charges -2000 -2300
Cash flow from investments -67000 -98300
Bank loan 28000 120000
Dividend -45000 -45000
Cash flow from financing -17000 75000
Total Cash Flow -43700 -41000
Beginning Cash 83700 83700
Closing cash 40000 42700
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