Balance sheet Cash Accounts receivables Inventories Prepaid advertising Beginning Ending Changes 440.00 562.00 100.00 120.00 123.00 191.00 82.00 98.00 Net PP&E 700.00 779.00 = Total assets 1445.00 1750.00 Accounts payable to suppliers of inventories 65.00 105.00 Salary payable to salespeople 51.00 81.00 Advance received [Unearned revenue] 78.00 85.00 Interest payable 12.00 22.00 Debt: Principal Taxes payable = Total liabilities Paid-in capital Retained earnings =Total equity = Total liabilities + Total equity 300.00 350.00 15.00 19.00 521.00 662.00 500.00 545.00 424.00 543.00 924.00 1088.00 1445.00 1750,00 Income statement Sales revenue For the year 1500.00 Cost of merchandize sold 450.00 Advertising expense 225.00 Salary expense Depreciation expense Operating Income Interest expense = Earnings before taxes Tax expense = Net Income Deriving cash flows Operating cash flows Adjustments 340.00 132.00 353.00 78.00 275.00 110.00 165.00 = Cash received from customers Adjustments = (Cost of goods purchased) Cash (paid) to suppliers of inventory Adjustments = Cash (paid) for advertising 0.00 0.00 0.00 0.00 Adjustments = Cash (paid) for salesperson salaries 0.00 (Depreciation expense) -132.00 Adjustments Increase in accumulated depreciation due to operating activities = Cash paid for depreciation 132.00 0.00 Adjustments = Cash (paid) for interest 0.00 Adjustments = Cash (paid) for taxes 0.00 = Operating cash flows Investing cash flows Assume that no PP&E was sold during the year Adjustments = Capital (expenditures) = Investing cash flows 0.00 0.00 Financing cash flows Assume no debt was repaid during the year = Borrowings (repayments) 0.00 Assume that no shares were repurchased during the year = Capital contributions (distributions) 0.00 = Dividends (paid) Cash flow statement: As reported Adjustments = OCF in the indirect format ICF in the direct format 0.00 0.00 0.00 Financing cash flows 0.00 |= Net cash flows 0.00 Check: Net cash flows - change in cash=0 Cash flow data Cash received from customers Cash of goods(purchased): Put minus sign in front of outflows Cash (paid) to suppliers: Put minus sign in front of outflows Cash (paid) for advertising: Put minus sign in front of outflows Cash (paid) for salaries: Put minus sign in front of outflows Cash (paid) for interest: Put minus sign in front of outflows Cash (paid) for taxes: Put minus sign in front of outflows US GAAP Operating cash flow (Capital expenditures): Put minus sign in front of outflows Net proceeds from debt Net capital contributions (Dividends): Put minus sign in front of outflows Year 2