Question

Item Prior year Current year Accounts payable 8,120.00 7,915.00 Accounts receivable 6,002.00 6,603.00 Accruals 1,020.00 1,571.00 Cash ??? ??? Common Stock 11,862.00 12,878.00 COGS 12,799.00 18,209.00 Current portion long-term debt 5,011.00 5,066.00 Depreciation expense 2,500 2,760.00 Interest expense 733 417 Inventories 4,243.00 4,814.00 Long-term debt 14,938.00 13,767.00 Net fixed assets 50,217.00 54,795.00 Notes payable 4,346.00 9,870.00 Operating expenses (excl. depr.) 13,977 18,172 Retained earnings 28,963.00 29,912.00 Sales 35,119 46,835.00 Taxes 2,084 2,775 What is the firm's cash flow from financing? Assignment is past due:

Answer 1

Answer:

$2,321

Explanation:

For computing the net cash flow from financing activities, first we have to determine the net income and then the dividend amount which is shown below:

Net income =  Sales - Cost of Goods Sold - Operating Expenses - Depreciation Expense - Interest Expense - Taxes

= $46,835 - $18,209 - $18,172 - $2,760 - $417 - $2,775

= $4,052

Now the dividend would be computed below:

The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

$29,912 = $28,963 + $4,052 -  dividend paid

$29,912 = $33,015 -  dividend paid

So, the dividend would be

= $33,015 - $29,912

= $3,103

Cash flow from Financing activities  

Add: Increase in Common Stock $1,016        ($12,878 - $11,862)

Add: Current Portion Long-term Debt $55        ($5,066 - $5,011)

Less: Decrease in Long-term Debt -$1,171       ($13,767 - $14,938)

Add: Increase in Notes Payable $5,524       ($9,870 - $4,346)

Less: Dividend Paid  $3,103

Net Cash flow from Financing activities        $2,321