Prepare the cash flow statement for “Beta” Company using the indirect method Prepare the cash flow statement for “Beta” Company using the direct method Analyze the cash flow statement for “Beta” (max 250 words)
Subject 1
A comparative balance sheet for “BETA” Company containing data in € for the most recent years is as follows:
|
Comparative Balance Sheet |
|||||
|
Assets |
20X1 |
20X0 |
Liabilities & |
20X1 |
20X0 |
|
Fixed assets: |
|
|
Stockholders' equity: |
|
|
|
Property, plant and equipment |
160,000 |
135,000 |
Common stock |
129,900 |
105,900 |
|
Less depreciation |
(45,000) |
(37,500) |
|
55,800 |
37,500 |
|
Net property, plant and equipment |
115,000 |
97,500 |
Total stockholders' equity |
185,700 |
143,400 |
|
Long-term investments |
21,500 |
15,000 |
Long - term liabilities: |
|
|
|
Total fixed assets |
136,500 |
112,500 |
Long-term notes payable |
57,000 |
54,000 |
|
Current assets: |
|
|
Total long-term liabilities |
57,000 |
54,000 |
|
Cash and cash equivalents |
51,000 |
43,500 |
Current liabilities: |
|
|
|
|
67,500 |
42,000 |
Accounts payable |
22,000 |
17,000 |
|
Inventories |
40,000 |
49,000 |
Wages payable |
3,300 |
2,100 |
|
Prepayment accounts |
8,000 |
8,000 |
Taxes payable |
3,000 |
15,000 |
|
Total current assets |
166,500 |
142,500 |
Short-term debt |
32,000 |
23,500 |
|
|
|
|
Total current liabilities |
60,300 |
57,600 |
|
|
|
|
Total liabilities |
117,300 |
111,600 |
|
Total assets |
303,000 |
255,000 |
Total liabilities & stockholders' equity |
303,000 |
255,000 |
The company reported for the current year 20X1 the following income statement:
|
Income Statement |
|
|
Sales |
202,500 |
|
Cost of goods |
(105,000) |
|
Gross margin |
97,500 |
|
Selling expenses |
(20,000) |
|
General & administrative expenses |
(27,700) |
|
Net income before taxes |
49,800 |
|
Income Taxes |
(9,000) |
|
Net Income after Taxes |
40,800 |
Additional Information:
The amounts of selling expenses and general & administrative expenses incorporate expenses related to wages of about €26,000, other expenses paid in cash of about€14,200 and depreciation expenses.
Required:
- Prepare the
cash flow statement for “Beta” Company using the indirect method - Prepare the cash flow statement for “Beta” Company using the direct method
- Analyze the cash flow statement for “Beta” (max 250 words)
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