Use the balance sheet and income statement below:   CLANCY’S DOG BISCUIT CORPORATION Balance Sheet as of December 31, 2021 and 2020 (in millions of dollars) Assets 2021   2020   Liabilities and Equity 2021   2020 Current assets:                 Current liabilities:               Cash and marketable securities $ 10     $ 10     Accrued wages and taxes $ 18     $ 12   Accounts receivable   27       23     Accounts payable   22       20   Inventory   33       28     Notes payable   22       18   Total $ 70     $ 61     Total $ 62     $ 50   Fixed assets:                 Long-term debt $ 27     $ 29   Gross plant and equipment $ 97     $ 76     Stockholders’ equity:               Less: Accumulated depreciation   24       18     Preferred stock (2 million shares) $ 2     $ 2   Net plant and equipment $ 73     $ 58     Common stock and paid-in-surplus (5 million shares)   11       11   Other long-term assets   21       21     Retained earnings   62       48   Total $ 94     $ 79     Total $ 75     $ 61   Total assets $ 164     $ 140     Total liabilities and equity $ 164     $ 140       CLANCY’S DOG BISCUIT CORPORATION Income Statement for Years Ending December 31, 2021 and 2020 (in millions of dollars)   2021   2020 Net sales $ 94     $ 98   Less: Cost of goods sold   48       44   Gross profits $ 46     $ 54   Less: Other operating expenses   8       7   Earnings before interest, taxes depreciation, and amortization (EBITDA) $ 38     $ 47   Less: Accumulated depreciation   6       6   Earnings before interest and taxes (EBIT) $ 32     $ 47   Less: Interest   7       7   Earnings before taxes (EBT) $ 25     $ 34   Less: Taxes   5       7   Net income $ 20     $ 27   Less: Preferred stock dividends $ 1     $ 1   Net income available to common stockholders $ 19     $ 26   Less: Common stock dividends   5       5   Addition to retained earnings $ 14     $ 21   Per (common) share data:               Earnings per share (EPS) $ 3.80     $ 5.20   Dividends per share (DPS) $ 1.00     $ 1.00   Book value per share (BVPS) $ 14.60     $ 11.80   Market value (price) per share (MVPS) $ 15.25     $ 15.20       Prepare a statement of cash flows for Clancy’s Dog Biscuit Corporation. (Enter your answers in millions of dollars. Amounts to be deducted should be indicated with a minus sign.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Use the balance sheet and income statement below:

 

CLANCY’S DOG BISCUIT CORPORATION
Balance Sheet as of December 31, 2021 and 2020
(in millions of dollars)
Assets 2021   2020   Liabilities and Equity 2021   2020
Current assets:                 Current liabilities:              
Cash and marketable securities $ 10     $ 10     Accrued wages and taxes $ 18     $ 12  
Accounts receivable   27       23     Accounts payable   22       20  
Inventory   33       28     Notes payable   22       18  
Total $ 70     $ 61     Total $ 62     $ 50  
Fixed assets:                 Long-term debt $ 27     $ 29  
Gross plant and equipment $ 97     $ 76     Stockholders’ equity:              
Less: Accumulated depreciation   24       18     Preferred stock (2 million shares) $ 2     $ 2  
Net plant and equipment $ 73     $ 58     Common stock and paid-in-surplus (5 million shares)   11       11  
Other long-term assets   21       21     Retained earnings   62       48  
Total $ 94     $ 79     Total $ 75     $ 61  
Total assets $ 164     $ 140     Total liabilities and equity $ 164     $ 140  
 

 

CLANCY’S DOG BISCUIT CORPORATION
Income Statement for Years Ending December 31, 2021 and 2020
(in millions of dollars)
  2021   2020
Net sales $ 94     $ 98  
Less: Cost of goods sold   48       44  
Gross profits $ 46     $ 54  
Less: Other operating expenses   8       7  
Earnings before interest, taxes depreciation, and amortization (EBITDA) $ 38     $ 47  
Less: Accumulated depreciation   6       6  
Earnings before interest and taxes (EBIT) $ 32     $ 47  
Less: Interest   7       7  
Earnings before taxes (EBT) $ 25     $ 34  
Less: Taxes   5       7  
Net income $ 20     $ 27  
Less: Preferred stock dividends $ 1     $ 1  
Net income available to common stockholders $ 19     $ 26  
Less: Common stock dividends   5       5  
Addition to retained earnings $ 14     $ 21  
Per (common) share data:              
Earnings per share (EPS) $ 3.80     $ 5.20  
Dividends per share (DPS) $ 1.00     $ 1.00  
Book value per share (BVPS) $ 14.60     $ 11.80  
Market value (price) per share (MVPS) $ 15.25     $ 15.20  
 

 

Prepare a statement of cash flows for Clancy’s Dog Biscuit Corporation. (Enter your answers in millions of dollars. Amounts to be deducted should be indicated with a minus sign.)

Expert Solution
Step 1

The statement of cash flows is the one in which cash inflows/outflows are shown related to three activities:

Operating

Investing, and

Financing activities

Under the direct method shows the operating activities of the companies according to the direct method in which adjustments for all the cash paid are made from the cash received during the financial year. 

 
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