You have been hired by Freddy Flintstone to prepare its 20X1 cash flow statement. The business provides you with its 20X1 income statement, as follows:

You determine that these numbers are correct. You review the business’s 20X1 beginning and ending balance sheets and find that the cash balance was $3800 on 1 January 20X1 and $10 200 on 31 December 20X1. You also find the following changes:

You additionally determine that during 20X1 the business sold equipment for $9600, purchased a van for $26 000 and issued a note payable for $15 000, all for cash.
The owner also withdrew $19 200. After all these changes, the business had average total assets of $148 000 for 20X1.
Required:
a Using your findings, prepare the business’s 20X1 cash flow statement. (Use the direct method for operating cash flows.)
b Calculate the business’s 20X1 cash return on total assets.

Transcribed Image Text:

Sales (net) Cost of goods sold Gross profit Salaries expense Depreciation expense Other expenses (all cash) Total operating expenses Net income $38 400 5600 2000 $113200 (62 800) $ 50400 (46000) $ 4400