Question

# You are the CCO of a lulu company. the company recordes were damaged by fires. your...

• You are the CCO of a lulu company. the company recordes were damaged by fires. your job is to remake the cash flow statement for the year that has just ended.
• The company had 3400 dolars in the bank at the end of the prior year (exmple;beginning cash), and its net working capital accounts, except cash, remained constant during the year.
• The firm earned \$9,100 in net income during the year and but only paid \$4,900 in dividends to its common shareholders.
• During the year, Wonderland Enterprises had sold \$3,700 worth of machinery and \$7,500 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 \$1,200.
• Finally, you have discovered that the firm has obtained a bank loan from the ADB bank for the amount of \$2,400.
• To answer the questions that follow, place your responses in the templates provided below.
1. Calculate the company’s cash flow from operating activities for the year.
1. find the firm's cash flow from investing activities for the year.
1. what is the companys cash flow from financing activities for the year.
1. Estimat the company's cash balance at the end of the year.

Solution:

a)Calculation of company’s cash flow from operating activities for the year:

Statement showing Cash from operating activities:

 Amount Net Income \$9,100 Add:Depreciation \$1200 Add:Change in working capital \$0 Cash flow from operating activities \$10,300

b)Cash flow from investing activities for the year:

=Sale of land+sale of machinery

=\$7,500+\$3,700

=\$11,200

c)Cash flow from financing activities for the year:

=\$2,400-\$4,900

=-\$2500

d)Calculation of cash balance at year end:

 Amount Opening cash balance(bank balance) \$3,400 Add:cash flow from operating activities \$10,300 Add:Cash flow from investing activities \$11,200 Less:Cash flow from Financing activities \$2,500 Cash balance at the year end \$22,400

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