ICK ON the 1CHOWING icon D oroer t0 CODy IS Conrents intoa spreaosneet) Partial Income Statement Year Ending 2017 Sales revenue $350, 000 Cost of goods sold $140,000 Fixed costs $43.000 $28,000 $40.000 Seling general and administrative expenses Deprnciation (Cick on the tolowng icon t in order to copy its contents into a sproadsheet) Partial Balance Sheet 1201/2016 ASSETS LIABILITIES Cesh $16,000 Notes payable $20,000 Accounts payable $40,000 Long-term detit $360,000 OWNERS EQUITY $142.000 Htained eamngs S2 000 Commen stock $14,000 S1R.000 Accounts iecevable es $100 000 rent anses Accamulated dprecton tng $130.000
ICK ON the 1CHOWING icon D oroer t0 CODy IS Conrents intoa spreaosneet) Partial Income Statement Year Ending 2017 Sales revenue $350, 000 Cost of goods sold $140,000 Fixed costs $43.000 $28,000 $40.000 Seling general and administrative expenses Deprnciation (Cick on the tolowng icon t in order to copy its contents into a sproadsheet) Partial Balance Sheet 1201/2016 ASSETS LIABILITIES Cesh $16,000 Notes payable $20,000 Accounts payable $40,000 Long-term detit $360,000 OWNERS EQUITY $142.000 Htained eamngs S2 000 Commen stock $14,000 S1R.000 Accounts iecevable es $100 000 rent anses Accamulated dprecton tng $130.000
ICK ON the 1CHOWING icon D oroer t0 CODy IS Conrents intoa spreaosneet) Partial Income Statement Year Ending 2017 Sales revenue $350, 000 Cost of goods sold $140,000 Fixed costs $43.000 $28,000 $40.000 Seling general and administrative expenses Deprnciation (Cick on the tolowng icon t in order to copy its contents into a sproadsheet) Partial Balance Sheet 1201/2016 ASSETS LIABILITIES Cesh $16,000 Notes payable $20,000 Accounts payable $40,000 Long-term detit $360,000 OWNERS EQUITY $142.000 Htained eamngs S2 000 Commen stock $14,000 S1R.000 Accounts iecevable es $100 000 rent anses Accamulated dprecton tng $130.000
The operating cash flow is? The capital spending is? The change in net working capital is? The cash flow from assets is?
Transcribed Image Text:ICK ON the 1CHOWING icon D oroer t0 CODy IS Conrents intoa spreaosneet)
Partial Income Statement Year Ending 2017
Sales revenue
$350, 000
Cost of goods sold
$140,000
Fixed costs
$43.000
$28,000
$40.000
Seling general and administrative expenses
Deprnciation
(Cick on the tolowng icon t in order to copy its contents into a sproadsheet)
Partial Balance Sheet 1201/2016
ASSETS
LIABILITIES
Cesh
$16,000 Notes payable
$20,000 Accounts payable
$40,000 Long-term detit
$360,000 OWNERS EQUITY
$142.000 Htained eamngs
S2 000 Commen stock
$14,000
S1R.000
Accounts iecevable
es
$100 000
rent anses
Accamulated dprecton
tng
$130.000
Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).
Expert Solution
Step 1
Capital spending is termed as the amount spent by the firm in the year to purchase or maintain the fixed assets. These include both tangible and intangible assets.
Step 2
(1): Operating Cash flow:
Cash flow statement
For the year ended 2017
Particulars
Amount($)
Amount($)
Cash flow from operating activities
Net Income (Note 1)
$93,000
Add: Non cash and non-operating items which have already been debited to profit and loss account
Depreciation
$46,000
Operating profit before working capital changes
$139,000
Add: Increase in current liabilities and decrease in current assets
Accounts Receivable
$9,000
Accounts payable
$5,000
Less: Increase in current assets and decrease in current liabilities
Inventories
($5,000)
Notes payable
($2,000)
Net increase or decrease in working capital
$7,000
Cash generated from Operations
$146,000
Note 1: Calculation of Net Income:
Particulars
Amount($)
Sales revenue
$350,000
Less: Cost of goods sold
($140,000)
Gross profit
$210,000
Less: Fixed costs
($43,000)
Selling, general and administrative expenses
($28,000)
Depreciation
($46,000)
Net income
$93,000
Step 3 Calculation:
(2): Capital spending:
Fixed asset in 2017
$448,000
Fixed asset in 2016
$368,000
Difference (A)
$80,000
Add: Depreciation for 2017 (B)
$46,000
Capital spending (A+B)
$126,000
(3): Change in net working capital:
Current Assets
Accounts receivable
$19,000
Inventories
$53,000
Cash
$26,000
Total current Assets (A)
$98,000
Current Liabilities
Notes payable
$12,000
Accounts payable
$24,000
Total Current Liabilities (B)
$36,000
Net Working Capital (A-B)
$62,000
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