Question

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.

Answer 1

Cash Flow Statement
For the Year ended
Particulars	Amount $
Cash Flow from Operating Activities
Net Income	18300
Adjustments
Add: Depreciation	2300
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
Dividends paid	-13800
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

answered by: anonymous