You are the CFO of a company called hamburger. Unfortunately,
the firm’s headquarters (where all the records are kept) have
recently been destroyed by fire. So, your task is to recreate the
cash flow statement for the year that has just ended.
• The firm originally had $4,800 in the bank at the end of the prior year (i.e., beginning cash), and its net working capital accounts, except cash, remained constant during the year.
• The company earned $18,300 in net income during the year and but only paid $13,800 in dividends to its common shareholders.
• During the year, hamburger had sold $7,500 worth of machinery and $15,100 worth of land, which are no longer needed in the firm’s operations.
• You have just been spoken to the firm’s accountants and learnt that the annual depreciation expense for the year is $2,300.
• Finally, you have discovered that the firm has obtained a bank loan from the Emirates Islamic Bank for the amount of $4,700.
• To answer the questions that follow, place your responses in the templates provided below.
a. Calculate the company’s cash flow from operating activities for the year.
b. Determine the company’s cash flow from investing activities for the year.
c. Find the company’s cash flow from financing activities for the year.
d. Estimate the firm’s cash balance at the end of the year.
|Cash Flow Statement|
|For the Year ended|
|Cash Flow from Operating Activities|
|Total Cash Flow from Operating Activities||20600|
|Cash flows from investing activities|
|Proceeds from sale of Machinery||7500|
|Proceeds from sale of Land||15100|
|Total Cash Flow from investing Activities||22600|
|Cash flows from financing activities|
|Proceeds from Bank Loan||4700|
|Net cash used in financing activities||-9100|
|Net increase in cash and cash equivalents||34100|
|Cash and cash equivalents at beginning of period||4800|
|Cash and cash equivalents at end of period||38900|
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