The 2014 income statement and the 2014 comparative balance sheet of T-Bar-M Camp Inc. have just been
Question:
T-Bar-M Camp Inc.
Income Statement
For the Year Ended December 31, 2014
(in thousands)
Revenues:
Sales revenue ................................................................................................ $436
Expenses:
Cost of goods sold......................................................................................... $221
Salary expense.................................................................................................... 48
Depreciation expense ........................................................................................ 57
Interest expense................................................................................................. 13
Total expenses ................................................................................................ 339
Net income .................................................................................................... $ 97
Requirements
1. Prepare a statement of cash flows for 2014 in the format that best shows the relationship between net income and operating cash flow. The company sold no plant and equipment or long-term investments and issued no notes payable during 2014. There were no non-cash investing and financing transactions during the year. Show all amounts in thousands.
2. Answer the board members' question: Why is the cash balance so low? Point out the two largest cash payments during 2014.
3. Considering net income and the company's cash flows during 2014, was it a good year or a bad year? Give your reasons. Explain the format you chose for the statement of cash flows.
Step by Step Answer:
Financial Accounting
ISBN: 978-0133472264
5th Canadian edition
Authors: Charles Horngren, William Thomas, Walter Harrison, Greg Berberich, Catherine Seguin