Create the statement of cash-flow with indirect method Interpret the result of the statement of cash flow
Question:
Create the statement of cash-flow with indirect method
Interpret the result of the statement of cash flow with percentage
Required:
1. Use the balance sheet as follows to classify each activity (operating, investing, and financing) from the column of different.
2. Create a new statement of cash-flow from your classification on balance sheet.
The statement of cash flow will be provided to measure the company’s cash flow situation. Also, you need to interpret the result of your measurement.
| Balance sheet | | | | |||
| | | | | | | |
| SILVERT CORPORATION | | | | | | |
| Balance Sheet | | | | | | |
| December 31 | | | | | | |
| | | | Different | Operating | Investing | Financing |
| | 2012 | 2011 | | | | |
| ASSET | | | | | | |
| Cash | $ 28,000 | $ 20,000 | $8,000 | | | |
| Receivable (net) | 70,000 | 62,000 | $8,000 | | | |
| Other current assets | 90,000 | 73,000 | $17,000 | | | |
| Long-term investment | 62,000 | 60,000 | $2,000 | | | |
| Plant and equipment (net) | 510,000 | 470,000 | $40,000 | | | |
| Total Assets | $ 760,000 | $ 685,000 | $75,000 | | | |
| | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | |
| Current liabilities | $ 75,000 | $ 70,000 | $5,000 | | | |
| Long-term debt | 80,000 | 90,000 | ($10,000) | | | |
| Common stock | 330,000 | 300,000 | $30,000 | | | |
| Retained earnings | 275,000 | 225,000 | $50,000 | | | |
| Total liabilities and stockholders’ equity | 760,000 | 685,000 | $75,000 | | | |
| | | | | | | |
3. Create the statement of cash-flow by using the indirect method. Company has net income as starting point of $80,000.
Expert Answer:
Answer 1 Silvert Corporation Balance Sheet December 31 Difference Operating Investing Financing 2012 ... View the full answer
Fundamentals of Corporate Finance
ISBN: 978-0078034640
7th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
