Question

Use the balance sheet and income statement below: VALIUM’S MEDICAL SUPPLY CORPORATION Balance Sheet as of December 31, 2015 and 2014 (in thousands of dollars) 2015 2014 2015 2014 Assets Liabilities and Equity Current assets: Current liabilities: Cash and marketable securities $ 74 $ 73 Accrued wages and taxes $ 50 $ 43 Accounts receivable 191 183 Accounts payable 156 143 Inventory 316 293 Notes payable 133 133 Total $ 581 $ 549 Total $ 339 $ 319 Fixed assets: Long-term debt: $ 573 $ 560 Gross plant and equipment $ 1,079 $ 886 Stockholders’ equity: Less: Depreciation 150 115 Preferred stock (6 thousand shares) $ 6 $ 6 Common stock and paid-in surplus 120 120 Net plant and equipment $ 929 $ 771 (100 thousand shares) Other long-term assets 138 138 Retained earnings 610 453 Total $ 1,067 $ 909 Total $ 736 $ 579 Total assets $ 1,648 $ 1,458 Total liabilities and equity $ 1,648 $ 1,458 VALIUM’S MEDICAL SUPPLY CORPORATION Income Statement for Years Ending December 31, 2015 and 2014 (in thousands of dollars) 2015 2014 Net sales $ 896 $ 806 Less: Cost of goods sold 391 354 Gross profits $ 505 $ 452 Less: Other operating expenses 49 43 Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 456 $ 409 Less: Depreciation 35 33 Earnings before interest and taxes (EBIT) $ 421 $ 376 Less: Interest 50 44 Earnings before taxes (EBT) $ 371 $ 332 Less: Taxes 133 113 Net income $ 238 $ 219 Less: Preferred stock dividends $ 6 $ 6 Net income available to common stockholders $ 232 $ 213 Less: Common stock dividends 75 75 Addition to retained earnings $ 157 $ 138 Per (common) share data: Earnings per share (EPS) $ 2.32 $ 2 Dividends per share (DPS) $ 0.75 $ 0.75 Book value per share (BVPS) $ 7.30 $ 5.73 Market value (price) per share (MVPS) $ 8.33 $ 6.21 Prepare a statement of cash flows for Valium’s Medical Supply Corporation. (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign. Leave no cells blank - be certain to enter "0" wherever required.) Statement of Cash Flows for Year Ending December 31, 2015 (in thousands of dollars) A. Cash flows from operating activities $ 238 Additions (sources of cash): 35 Subtractions (uses of cash): Net cash flow from operating activities $ B. Cash flows from investing activities Subtractions: $ 7 13 Net cash flow from investing activities $ C. Cash flows from financing activities Additions: $ Subtractions: Net cash flow from financing activities $ D. Net change in cash and marketable securities $

Answer 1

Cash flow Statement:
Cash flow from the Operating Activities:
		Amount $
Net Income		238
Add : Dep		35
Less: increase in AR	191-183	-8
Less: increase in Inven	316-293	-23
Add: increase in AP	156-143	13
Add: increase in Accrued W&T	50-43	7
Net inflow of cash from operating activities		262
Cash flow from the Investing Activities:
Less: purchase of asset	1079-886	-193
Net outflow of cash from Investing activities:		-193
Cash flow from the Financing Activities:
Less: dividend paid	6+75	-81
Add: increase in debt	573-560	13
Net out flow of cash from financing activities		-68
Total cash inflow from all activities		1
Add: Opening cash		73
Closing cash		74