Explain how the six highlighted accounts impacted cash flow

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Reference no: EM13973556

Cash Flows and Capital Budgeting

Case Study Bob Smith Loan Review Data for Teams Comparative Balance Sheets and Cash Flow Statement Worksheet.

ASSETS

2014

2013

Cash Up or Down

Cash and marketable securities

$ 33,411

$ 16,566

$ 16,845

Accounts receivable

260,205

318,768

$ 58,563

Inventory

423,819

352,740

$ (71,079)

Other current assets

41,251

29,912

$ (11,339)

Total current assets

758,686

717,986

$ (40,700)

Gross Plant and equipment

1,931,719

1,609,898

(321,821)

Less: Accumulated depreciation

(419,044)

(206,678)

212,366

Net plant and equipment

1,512,675

1,403,220

$ (109,455)

Goodwill and other assets

382,145

412,565

$ 30,420

Total Assets

2,653,506

2,533,771

(119,735)

 




LIABILITIES AND EQUITY




Accounts payable and accruals

378,236

332,004

$ 46,232

Notes payable

14,487

7,862

$ 6,625

Accrued income taxes

21,125

16,815

$ 4,310

Total current liabilities

$       413,848

$      356,681

$ 57,167

Long-term debt

679,981

793,515

$ (113,534)

Total liabilities

1,093,829

1,150,196

(56,367)

Preferred stock




Common stock (10,000 shares)

10,000

10,000

0

Additional paid in capital

975,465

975,465

0

Retained earnings

587,546

398,110

189,436

Less: Treasury stock

(13,334)


(13,334)

Total common equity

1,559,677

1,383,575

176,102

Total Liabilities and Equity

2,653,506

2,533,771

119,735

In addition, it was reported that the company had a net income of $3,155,848 and depreciation expenses were equal to $212,366 during 2014.

Net Income            $3,155,848
Depreciation           $212,366
Dividends Paid        -$2,966,412

1. The bank told Bob to increase cash to $70,000 from 2013 to 2014. But cash increased from $16,566 in 2013 to just $33,411 in 2014, well short of $70,000, why?

2. Explain how the six highlighted accounts impacted cash flow from one year to the next. The accounts either added or reduced the cash balance from one year to the next. I.e., the accounts were either a Source or Use of cash.

3. This one worksheet provides all the data you need to complete the project. You may want to assign each team member a respective 'Explain'.

Reference no: EM13973556

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