cashflow statement indirect method

23 24 25 26 27 28 10000 8000 29 17000 20000 30 20000 29000 31 50000 45000 32 97000 102000 33 34 27000 24000 35 50000 45000 55 36 20000 33000 37 97000 102000 38 39 60000 40 40000 41 20000 42 8000 43 12000 44 45 46 47 0 1 2 12000 3 4000 4 3000 5 9000 6 3000 7 31000 8 9 -9000 48 10 11 5000 55 12 -25000 59 13 -20000 14 2000 15 8000 16 10000 17 2000 18 19 20 21 48 49 45000 50 51 4000 52 41000 53 50000 54 9000 55 56 45000 57 50000 58 5000 59 60 33000 61 12000 45000 62 20000 63 25000 64 Cash flow statement 2008 Cash from Operating activities Net income add depreciation add decrease in acc receivable add decrease in inventory add increase in acc payable Cash from operating activities Cash from investing activities Purchase of equipment Cash from financing activities Issue of stocks dividend paid cash from financing activities Net cash flow opening cash closing cash Increase in cash b) overall cash increase, good cash from operating activities positive, good operating activities finance purchase of asset and payment of dividend Dividend very high It is the 31 st December 2008 and the following financial information is available Balance Sheet Year ended 31 st Dec 2008 31 st Dec 2007 Assets Cash Accounts Receivable Inventory Plant and Equipment (net) Total Assets Liabilities and Stock Holders Equity Accounts Payable Common Stock ($1 par stocks) Retained earnings Total liabilities and Stock holders equity Income Statement Year ended 31 December 2008 Sales Revenue Cost of Sales Gross Income Expenses Net Income The following information is available: (i) Expenses includes depreciation of $4,000 Required: Prepare a cashflow statement for the year ended 31 st December 2008. 18 marks Analyse your results. 7 marks Note 1 Opening Net Equipment (Net Equipment = cost - accumulated depreciation) Depreciation Closing net equipment should be It is Therefore Purchase of asset Note 2 Opening Common stock Closing Common Stock Increase due to stock issue Note 3 Opening Retained Earnings Increased by Net Income Closing Retained Earnibgs decrease Explanation of decrease: Dividend paid