Salza Technology Corporation increased its sales from $375,000 in 2018 to $450,000 in 2019 as shown in the firm’s income statements presented below. LeAnn Sands, chief executive officer and founder of the firm, expressed concern that the cash account and the firm’s marketable securities declined substantially between 2018 and 2019. Salza’s complete balance sheets are also shown. Ms. Sands is seeking your assistance in the preparation of a statement of cash flows for Salza Technology.

A. Prepare a statement of cash flows for 2019 for Salza Technology Corporation.

B. Provide a brief description of what happened in terms of cash flows (both inflows and outflows) for Salza between 2018 and 2019.

C. Use your calculations from Part A for cash flows from operating and investing activities to indicate the extent to which Salza was building or burning cash in 2019.

D. Convert the 2019 annual cash build or cash burn to a monthly rate. If cash flow activities relating to operations and investing for 2019 continue into 2020, indicate (1) how long it will be before Salza runs out of cash (if Salza is burning cash) or (2) the expected 2020 year-end cash account balance if Salza is building cash. Assume no changes in cash flows from financing activities in 2020 for calculation purposes.

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SALZA TECHNOLOGY CORPORATION ANNUAL INCOME STATEMENTS FOR YEAR ENDED DECEMBER 31 (IN $ THOUSANDS) Net sales Less: Cost of goods sold Gross profit Less: Operating expenses Less: Depreciation Less: Interest Income before taxes Less: Income taxes Net income Cash dividends 2018 $375 -225 150 -46 -25 -4 75 -20 $ 55 $ 17 2019 $450 -270 180 -46 -30 -4 100 -30 $ 70 $ 20