Reference no: EM133133375
Question - KKL Financial is doing really well. Management is considering an acquisition, however this would require additional bank financing. Tom, the CFO has a great relationship with their bank, and knows that his bank manager will require a statement of cash flows before they can begin to discuss any additional financing.
Tom pulls out the recent balance sheet and gathers up the other necessary information.
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KKL Financial Inc. Balance Sheet
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December 31, 2021
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December 31, 2020
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Cash
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120,000
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105,000
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Accounts Receivable
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570,000
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558,000
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Inventory
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510,000
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486,000
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Prepaid Expenses
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32,000
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64,000
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Total Current Assets
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1,232,000
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1,213,000
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Investments
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100,000
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109,000
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Plant & Equipment
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2,200,000
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1,800,000
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Less: Accumulated depreciation
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997,000
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767,000
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TOTAL Assets
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2,535,000
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2,355,000
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Accounts Payable
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269,000
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237,000
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Notes Payable
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500,000
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500,000
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Accrued Expenses
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37,000
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58,000
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Current Liabilities
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806,000
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795,000
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Bonds Payable
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150,000
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100,000
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TOTAL Liabilities
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956,000
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895,000
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Preferred Stock
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100,000
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100,000
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Common Stock
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500,000
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500,000
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Retained Earnings
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979,000
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860,000
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TOTAL Shareholder's Equity
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1,579,000
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1,460,000
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TOTAL Liabilities and Shareholder's Equity
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$2,535,000
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$2,355,000
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Additional Information:
Net income for 2021 was $309,000
Cash dividends of $150,000 were declared and paid to common shareholders
Preferred dividends of $40,000 were paid
The company sold $9,000 in long term investments
The company issued $50,000 in long term bonds
Required - Make a statement of cash flows for 2021.