Prepare a statement of cash flows for year ending december

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Reference no: EM131165717

Cash Flow Statement - Barco Industries

You are given the following information for Barko Industries:

Barko Industries
Balance Sheet (Partial)

 

Year 3

Year 4

Cash

$70,000

$9,640

AR

70,000

85,000

Inventories

87,000

84,000

Accounts Payable

48,000

51,000


Barko Industries
Income Statement
For the Year Ending December 31, Year 4

Sales


$560,000

Operating Expenses

$420,000


Depreciation Expense

46,000

466,000

Income Before Taxes


$94,000

Income Tax Expense


$37,600

Net Income


$56,400

Other Data:

• Barko Industries sold an asset and recorded a loss on the sale of $8.700. The sale price was $220,000 and the asset was originally purchased for $360,000.

• Dividends paid in Year 4 were $22, 460.

Required:

1. Prepare a statement of cash flows for the year ending December 31, Year 4 using the indirect method.

2. What conclusions could you arrive at regarding the cash position of the firm?

3. What information was provided in the statement of cash flows that was not evident if just the balance sheet and the income statement were examined?

Reference no: EM131165717

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