Reference no: EM131442771

Assignment: Statement of Cash Flows Project

Use the comparative balance sheet and the comparative income statement on the following page to complete this assignment.

Prepare the following documents:

o Schedules showing the amount and percentage change from 2008 to 2009 for the comparative income statements and the balance sheets

o Common-size income statements and balance sheets for 2008 and 2009

o A 2009 Statement of Cash Flows using the indirect method (Financials needed are the comparative balance sheet and the comparative income statement on page two of this document. No additional information is needed.)

Write a 200-300 word memo that presents your analysis of the documents prepared.

Your analysis should include:

o The favorable and unfavorable changes in the components and composition of the statements prepared o The significant changes from Operating Activities, Investing Activities, and Financing Activities

                                                                   2009                    2008
Cash                                                         $ 40,000               $ 24,000
Accounts receivable (net)                             48,000                  41,500
Inventory                                                   43,000                  34,500
Prepaid expenses                                        19,000                  15,000
Total Current Assets                                   $ 150,000             $ 115,000
Plant and equipment                                    $ 67,000               $ 61,000
Less accumulated depreciation                       (41,000)               (23,000)
Plant and equipment (net)                            $ 26,000                $ 38,000
Long-term investments                                  90,000                 89,000
Total Assets                                                 $ 266,000             $ 242,000
Accounts payable                                          $ 13,000               $ 11,000
Accrued liabilities                                            55,000                  71,000
Total Current Liabilities                                   $ 68,000               $ 82,000
Long-term debt                                             25,000                   8,000
Deferred taxes                                              4,000                     3,500
Total Liabilities                                               $ 97,000                $ 93,500
Common stock and additional paid-in capital     112,000                  97,000
Retained earnings                                          57,000                    51,500
Total Liabilities and Equity                               $ 266,000              $ 242,000
Sales                                                            $ 155,000              $ 125,000
Cost of goods sold                                        83,000                     62,500
Gross profit                                                  $ 72,000.00            $ 62,500
Selling and administrative                                45,700                    37,500
Depreciation                                                  18,000                    16,800
Operating Profit                                             $ 8,300                  $ 8,200
Interest expense                                           2,000                        1,327
Earnings before tax                                       $ 6,300                   $ 6,873
Tax expense                                                 800                          873
Net Income                                                   $ 5,500                   $ 6,000