CONSTRUCT A STATEMENT OF CASH FLOWS

Chapter 4 Balance Sheet As of December 31, Year 2 Increase Year 2 Year 1 Decrease Assets Leonardo Inc. Income Statement For the Year Ending December 31, Year 2 Cash Accounts receivable (net) nven Property & equipment Accumulated depreciation Total assets $37,760 $16,400 $21,360 44,800 134,240 118,800 275,656 246,960 26,960 52,000 15,440 28,696 Sales $1,400,000 847,000 $553,000 Cost of goods sold 51,656 $448,000 $400,000 $48,000 ross Operating expenses: Depreciation expense Other operating expenses $24,696 199,304 Liabilities Accounts payable Accrued wages payable Accrued taxes payable Bonds outstanding Total liabilities $58,240 $36,000 $22,240 15,000 8,000 66,080 101,000-34,920 Total operating expenses Operating profit (EBIT) 224,000 $329,000 17,920 14,560 2,920 Interest expense 119,000 Earnings before taxes $210,000 $156,800 $160,000 $-3,200 Taxes 70,000 Stockholders' Equity Net income $140,000 Common stock Retained earnings Total stockholders' equity Total liabilities and equity $44,200 $49,000 -4,800 56,000 $291,200 $240,000 $51,200 $448,000 $400,000 $48,000 247,000 191,000 Leonardo Inc. Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Net income Adjustments Depreciation Changes in current operating assets and liabilities in accounts receivable in inventory in accounts payable in accrued wages payable in accrued taxes payable Net cash flow from operating activities Cash flows from investing activities: Cash from the of property & equipment -28,696 Net cash flow from investing activities Cash flows from financing activities: Cash associated with Cash associated with common stock outstanding bonds -34,920 Cash from the of dividends Net cash flow from financing activities Change in cash Cash at the beginning of the year 16,400 Cash at the end of the year