Chapter 2 Case study: Cash Flows and Financial Statements at Sunset Boards, Inc Sunset Boards is a small company that manufactures and sells surfboards in Mallibu. Tad Marks, the founder of the company, is in charge of the design and sale of the surfboards, but his background is in surfing, not business. As a result, the company's financial records are not well maintained Tad and his friends and family provided the initial investment in Sunset Boards. Because the initial investment was relatively small, and the company has made surfboards only for its own store, the investors have not required detailed financial statements from Tad. However, thanks to word of mouth among professional surfers, sales have picked up recently, and Tad is considering a major expansion. His plans include opening another surfboard store in Hawail, as well supplying his "sticks" (surfer lingo for boards) to other sellers. Tad's expansion plans require a significant Investment, which he plans to finance with a combination of additional funds from outsiders plus some money borrowed from banks. Naturally, the new investors and creditors require more organized and detalled financial statements than Tad as previously prepared. At the urging of his investors, Tad as hired financial analyst Paula Wolfe to evaluate the performance of the company of the past year. After rooting through old bank statements, sales recelpts, tax returns, and other records, Paula has assembled the following information: Sunset Boards current pays out 50 percent of net income as dividends to Tad and the other original investors and has a 20 percent tax rate. You are Paula's assistant, and she has asked you to prepare the following: A. An income statement for 200922010 B. A Balance Sheet for 2009&2010 C. Operating cash flow for each year D. Cash Flow from Assets for 2010 E. Cash flow from creditors for 2010 F. Cash flow to stockholders for 2010 Question 1: How would you describe Sunset Boards' cash flow for 2010? Write a brief discussion. Question 2: In Kght of your discussion in the previous question, what do you think about Tad's expanalon plans