June€™s Camera Shop sells cameras and photographic supplies of all types to retail customers. June€™s also repairs cameras and provides color prints. To compete with other camera departments, June€™s offers fast, efficient, and effective repairs and photographic processing. For fiscal 2011 and 2010, June€™s accountant prepared the following statements of cash flows:

Required:
1. Does June€™s Camera Shop appear to have grown (in terms of property, plant, and equipment) during the past two years?
2. June€™s president, June Smith, would like to open a second store. Smith believes that $225,000 is needed to equip the facility properly. The business has $100,000 of cash and liquid investments to apply toward the $225,000 required. Do the data in the 2011 and 2010 statements of cash flow suggest whether or not June€™s Camera Shop is likely to be able to secure a loan for the remaining $125,000 needed for the expansion?
3. How long should it take June€™s Camera Shop to pay back the $125,000?

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June's Camera Shop Statements of Cash Flows For the Years Ended January 31, 2011 and 2010 2011 2010 Cash lows from operating activities 事 87,000 $63,000 Net income Adjustments to reconcile net income to net cash provided by operating activities: $41,000 17,000 19,000] 15,000 11,000 6,000 S 37,000 (12,000] (11,000) 14,000 5,000 3,000 Depreciation expense Increase in accounts receivable Increase in acoounts payable Increase in wages payable Increase nncome taxes payable Total adjusłments 37,000 $124,000 36,000 $ 99,000 Net cash provided by operating activities Cash flows from investing activities Purchase of long-term investments equipment $(15,0001 145,000 $(10,000] 40,000) Purchase of Net cash used by investing activities (60,000) (50,000) Cash flows from financing activities $(15,000 12,000 $(15,000) 10,000) Principal payments on mortgage Payment of dividends 25,000) 24,000 134,000 $158,000 Net cash usad by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year (27,000) $37,000 158,000 $195,000 3