Answer:
a.
Palmetto Statement of Cashflows
<u>For the Year Ended December 31, 2013 </u>
Cashflow from Operating Activities
Net Cashflow from Operaing Activities $15,600
Cashflow from Investing Activities
Net Cashflow from Investing Activities ($23,000)
Cashflow from Financing Activities
Net Cashflow from Financing Activities ($4,500)
Net Increase (Decrease) <u>($11,900)</u>
Add: Beginning of Period Cash balance $32,000
Ending Cash Balance <u>$20,100</u>
b. Operating Cash flow relates to the normal business operations of the business. A Net Cash Inflow from this therefore means that the business made a profit from its normal operations of selling fast food during 2013.
c. Investing Activities relate to transaction involving Fixed Assets as well as the stocks and bonds of other companies. The Net Cash flow was probably caused by Palmetto buying more Fixed Assets than they disposed of in the year 2013.
d. Financing activities relate to how the business is financed in terms of Equity and debt. The payments of Dividends therefore fall under here as they relate to Equity. A net cash outflow here therefore probably means that Palmetto paid out dividends to shareholders. They might have also repaid some loans but judging by how small the outflow is, the loans were either small or it was only dividends that were paid out.
