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Charra [1.4K]
3 years ago
9

You have just been hired as a financial analyst for Barrington Industries. Unfortunately, company headquarters (where all of the

firm's records are kept) has been destroyed by fire. So, your first job will be to recreate the firm's cash flow statement for the year just ended. The firm had $100,000 in the bank at the end of the prior year, and its working capital accounts except cash remained constant during the year. It earned $5 million in net income during the year but paid $700,000 in dividends to common shareholders. Throughout the year, the firm purchased $5.4 million of machinery that was needed for a new project. You have just spoken to the firm's accountants and learned that the annual depreciation expense for the year is $460,000; however, the purchase price for the machinery represents additions to property, plant, and equipment before depreciation. Finally, you have determined that the only financing done by the firm was to issue long-term debt of $1 million at a 6% interest rate.
What was the firm's end-of-year cash balance?

Business
2 answers:
Andru [333]3 years ago
6 0

Answer:

The ending cash balance is $40,000

Explanation:

Kindly check attached picture for detailed explanation on Cash Flow statement

Harman [31]3 years ago
4 0

Answer:

$410,000

Explanation:

check the picture attached below for further explanation about the problem. I hope it helps it. Thank you

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Answer:

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Operating activities have to do with the day to day operations of the business.

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Financing activities have to do with the long term debt and equity of a company and this includes dividends so this falls under her.

2. Cashflow due to financing activities:

Cash Balance second year =  Cash Balance first year + Cash Flows From Operating Activities + Cash Flows From Investing Activities + Cash Flows From Financing Activities

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