Cash Flow Practice Problems

Problem 1

Balance Sheet

	Year 2	Year 1
Cash	20	40
Trading security portfolio	145	150
Accounts Receivable	100	70
Inventory	125	140
Equipment	1,150	1,000
Accumulated Depreciation	(500)	(400)
Total Assets	1,040	1,000
Accounts payable	15	12
Accrued Interest Payable	7	8
Bond Payable	96	95
Common Stock (500 shares @ BOY no par)	750	500
Retained Earnings	347	545
Treasury Stock	(175)	(160)
Total Liabilities and Equity	1,040	1,000

Additional information for Year 2

1. No trading securities were bought or sold during the year.
2. No new bonds were issued during the year, but there was bond discount amortization of $1 for the year.
3. Sold equipment for $25 in cash. The equipment had an original cost of $40 and accumulated depreciation of $10 at the time of sale.
4. No common stock was issued for cash, but a 10% stock dividend was declared and distributed when the market price of the stock was $5.
5. Cash dividends of $25 were also paid during the year.

Required: Prepare cash flow statement for year 2.

	Year 2
	Details	Total
Cash Flow From Operations
Sub Total CFO
Cash Flow From Investing
Sub Total CFI
Cash Flow From Financing
Sub Total CFF
Net Change in Cash
Beginning Cash Balance
Ending Cash Balance