Peterson Bottling Compay Income Statement (000) Sales Cost of Goods Sold Operating Expenses Balance Sheet Assets...

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Peterson Bottling Compay Income Statement (000) Sales Cost of Goods Sold Operating Expenses Balance Sheet Assets Cash Accounts Receivable Inventories Prepaid Expenses General and Administrative Lamnings before Income and Tax Earnings after interest Net Income Gross Fixed Assets Year end 12/31/2013 Machinery, equipment, Total Assets Liabilities and Equity Accounts Payable Accruals $ Gross Profe S Long Term Debt Shareholder's Equity Selling S Delivery S S Total S Year end 12/31/201 S interest Expense S S S Total Current Assets S Land S Buildings S furnishings S Transportation equipment 5 Total Plant, Property & equipment S Less: Accumulated Depreciation S Net Fixed Assets S S Total Liabilities and Equity Tax S $ $ $ Total Current Liabilities S 5 Total Debt S Capital Stock $ Paid in Excess S Retained Earnings S Total Equity S $ S 21,418 14,235 7,183 $ S $ 3.964 921 1,213 1,563 1,629 6,118 1,065 297 768 1,414 179 4,785 2,817 576 3,393 307 461 713 6,001 6,036 528 2,721 6,114 13,278 (6,842) 6,436 11,221 80 560 4,467 5,107 11,221 Common Sze Common 2012 Size $ 22,703 $ 15,209 5 7,494 $ 4,141 $ 1,135 $ 1,212 $ 6,458 $ 1,006 5 311 $ 5 $ Difference 20x2 X2-X1 $ 1,349 $ 1,439 $ 1,397 $ 348 $ 4,533 $ 713 $ 6,782 695 278 417 $ 6,617 $ 528 $ 14,640 $ (7,492) $ 7,148 $ 11,681 $ 2,317 $ 565 $ 2,882 $ 3,274 $ 6,156 $ 80 $ 560 $ 4,885 $ 5,525 $ 11,681 Notes: 1. Common Stock, 800,000 shares issued and outstanding with par value of 50.10. 2 The long term debt consists of a $2,290000 note carrying an interest rate of 9.6% peer annum with $218,486 due on March 1 of each of the next 10 years and the balance due on the next March 1. Also included in long term debt is a 5 year note in the amount of $765,630 requiring interest payable at a rate of 12 percent per annum with the principal due at maturity. Step 1: Identify all Sources and Uses a) Calculate the differences for all accounts in the Balance Sheet, subtracting the older year from the newer year. b) Identify each difference as a source or use based on the following rules: a. An increase in an asset is a use of funds b. A decrease in an asset is a source of funds c. An increase in a liability is a source of funds d. A decrease in a liability is a use of funds c) The newer year Net Income is used as stated in the Income Statement. You do not take differences for the Income Statement. If Net Income is positive it is a source; if it is negative it is a use. d) You have to be told if there is a change in the Common Stock accounts. Issuing new shares is a source of funds. Retiring existing shares is a use of funds. e) You have to be told if dividends were paid. These are always a use of funds. Step 2: Calculate the Change in Net Working Capital a) Net Working Capital is defined as the difference between Current Assets and Current Liabilities. b) For the purpose of the Statement of Cash Flows, you need to identify all Current Asset and Current Liability changes in balances as sources or uses. Then you list all of the Sources (as positive numbers) and all of the Uses (as positive numbers). c) d) You add up all of the Sources, add up all of the uses, and subtract the uses from the sources. e) If the answer is positive, the Change in Net Working Capital is a Source. f) If the answer is negative, the Change in Net Working Capital is a Use. Step 3: Create the Statement of Cash Flows (SCF) a) In the setup of the SCF, all sources are listed as positive numbers and all uses are listed as negative numbe b) Operating Activities are: a. Net Income b. Change in Depreciation c. Change in Net Working Capital c) Investing Activities are the changes in Gross Fixed Assets d) Financing Activities are the changes in: a. Long Term Debt b. Common Stock c. Dividends e) Net Cash Flow = Total Sources - Total Uses as identified by each category. Again, net sources for each category would be positive and net uses would be negative Step 4: Reconciliation: Beginning Cash Balance + Net Cash Flow = Ending Cash Balance Note: You always know that you have done this correctly because of the reconciliation step #ypg 109 Peterson Bottling Compay Income Statement (000) Sales Cost of Goods Sold Operating Expenses Balance Sheet Assets Cash Accounts Receivable Inventories Prepaid Expenses General and Administrative Lamnings before Income and Tax Earnings after interest Net Income Gross Fixed Assets Year end 12/31/2013 Machinery, equipment, Total Assets Liabilities and Equity Accounts Payable Accruals $ Gross Profe S Long Term Debt Shareholder's Equity Selling S Delivery S S Total S Year end 12/31/201 S interest Expense S S S Total Current Assets S Land S Buildings S furnishings S Transportation equipment 5 Total Plant, Property & equipment S Less: Accumulated Depreciation S Net Fixed Assets S S Total Liabilities and Equity Tax S $ $ $ Total Current Liabilities S 5 Total Debt S Capital Stock $ Paid in Excess S Retained Earnings S Total Equity S $ S 21,418 14,235 7,183 $ S $ 3.964 921 1,213 1,563 1,629 6,118 1,065 297 768 1,414 179 4,785 2,817 576 3,393 307 461 713 6,001 6,036 528 2,721 6,114 13,278 (6,842) 6,436 11,221 80 560 4,467 5,107 11,221 Common Sze Common 2012 Size $ 22,703 $ 15,209 5 7,494 $ 4,141 $ 1,135 $ 1,212 $ 6,458 $ 1,006 5 311 $ 5 $ Difference 20x2 X2-X1 $ 1,349 $ 1,439 $ 1,397 $ 348 $ 4,533 $ 713 $ 6,782 695 278 417 $ 6,617 $ 528 $ 14,640 $ (7,492) $ 7,148 $ 11,681 $ 2,317 $ 565 $ 2,882 $ 3,274 $ 6,156 $ 80 $ 560 $ 4,885 $ 5,525 $ 11,681 Notes: 1. Common Stock, 800,000 shares issued and outstanding with par value of 50.10. 2 The long term debt consists of a $2,290000 note carrying an interest rate of 9.6% peer annum with $218,486 due on March 1 of each of the next 10 years and the balance due on the next March 1. Also included in long term debt is a 5 year note in the amount of $765,630 requiring interest payable at a rate of 12 percent per annum with the principal due at maturity. Step 1: Identify all Sources and Uses a) Calculate the differences for all accounts in the Balance Sheet, subtracting the older year from the newer year. b) Identify each difference as a source or use based on the following rules: a. An increase in an asset is a use of funds b. A decrease in an asset is a source of funds c. An increase in a liability is a source of funds d. A decrease in a liability is a use of funds c) The newer year Net Income is used as stated in the Income Statement. You do not take differences for the Income Statement. If Net Income is positive it is a source; if it is negative it is a use. d) You have to be told if there is a change in the Common Stock accounts. Issuing new shares is a source of funds. Retiring existing shares is a use of funds. e) You have to be told if dividends were paid. These are always a use of funds. Step 2: Calculate the Change in Net Working Capital a) Net Working Capital is defined as the difference between Current Assets and Current Liabilities. b) For the purpose of the Statement of Cash Flows, you need to identify all Current Asset and Current Liability changes in balances as sources or uses. Then you list all of the Sources (as positive numbers) and all of the Uses (as positive numbers). c) d) You add up all of the Sources, add up all of the uses, and subtract the uses from the sources. e) If the answer is positive, the Change in Net Working Capital is a Source. f) If the answer is negative, the Change in Net Working Capital is a Use. Step 3: Create the Statement of Cash Flows (SCF) a) In the setup of the SCF, all sources are listed as positive numbers and all uses are listed as negative numbe b) Operating Activities are: a. Net Income b. Change in Depreciation c. Change in Net Working Capital c) Investing Activities are the changes in Gross Fixed Assets d) Financing Activities are the changes in: a. Long Term Debt b. Common Stock c. Dividends e) Net Cash Flow = Total Sources - Total Uses as identified by each category. Again, net sources for each category would be positive and net uses would be negative Step 4: Reconciliation: Beginning Cash Balance + Net Cash Flow = Ending Cash Balance Note: You always know that you have done this correctly because of the reconciliation step #ypg 109

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Step 1 Identify all Sources and Uses a Calculate the differences for all accounts in the Balance Sheet Assets Difference 20132012 Sources Uses Cash 21... View the full answer