You are given the following information for the ABC Corporation:
|
ABC Corporation
|
||
|
Balance Sheet (Partial)
|
||
|
Year 3
|
Year 4
|
|
| Cash |
$70,000
|
$9,640
|
| AR |
70,000
|
85,000
|
| Inventories |
87,000
|
84,000
|
| Accounts Payable |
48,000
|
51,000
|
|
ABC Corporation
|
||
|
Income Statement
|
||
|
For the Year Ending December 31, Year 4
|
||
| Sales |
$560,000
|
|
| Operating Expenses |
$420,000
|
|
| Depreciation Expense |
46,000
|
466,000
|
| Income Before Taxes |
$94,000
|
|
| Income Tax Expense |
$37,600
|
|
| Net Income |
$56,400
|
|
Other Data:
- The ABC corporation sold an asset and recorded a loss on the sale of $8.700. The sale price was $220,000 and the asset was originally purchased for $360,000.
- Dividends paid in Year 4 were $22, 460.
Required:
- Prepare a statement of cash flows for the year ending December 31, Year 4 using the indirect method.
- What conclusions could you arrive at regarding the cash position of the firm?
- What information was provided in the statement of cash flows that was not evident if just the balance sheet and the income statement were examined?
0 comments