This information is for O’Brien Corporation for the year ended December 31,
2012.
Cash received from lenders ..... $20,000
Cash received from customers ... 50,000
Cash paid for new equipment .... 28,000
Cash dividends paid ........ 8,000
Cash paid to suppliers ....... 16,000
Cash balance 1/1/12 ....... 12,000
Instructions
(a) Prepare the 2012 statement of cash flows for O’Brien Corporation.
(b) Suppose you are one of O’Brien’s creditors. Referring to the statement of cash flows, evaluate O’Brien’s ability to repay its creditors.