SHOW YOUR WORK FOR CALCULATION PROBLEMS

Given the following information, calculate the Cash Flow using the Direct and Indirect Methods.

($ 000) Year 1 Year 2

Net income 7,800 18,600

Deprec., Depletion & Amortiz. 3,000 4,000

Capital Spending 6,000 8,000

Repayment of Long Term Debt 2,000 2,000

Dividends paid to shareholders 2,800 2,800

Cash Balance [end of Year 0] 3,000 ---

Cash Balance [end of Year 1] ? ---

Cash Balance [end of Year 2] --- ?

Cash Received from customers 25,800 42,600

Cash Payments [for operations] 14,000 20,000

Increase in Current Assets 750 <1,000>

Increase in Current Liabilities 250 1,000

NOTE: Account items highlighted need to be calculated based on the information given so that you may correctly present the solution on both Direct and Indirect methods. Remember you must include reconciliation when presenting Direct method.