[wanye]

Hi guys, need help in checking on whether my cashflow statement is correct based on the following income statement & balance sheet? If not, where went wrong?


income statement
====================

sales 378000
less trade discount 4000
374000
less expenses
cost of goods sold 232000
salary expenses 82000
advertising expenses 10000
depreciation expenses 11000
income tax expenses 17000
loss on sale of investment 3000
355000
net profit 19000

balance sheet
================================

Assets 2006 2005 incr/decr
cash 12000 5000 7000
account receivable 19000 33000 -14000
Inventory 94000 66000 28000
Prepaid Advertising 12000 9000 3000
Long‐term Investments 30000 42000 -12000
Fixed and Equipment, net 106000 69000 37000
Total Assets 273000 224000 49000

Liabilities and shareholders' equity
accounts payable 27000 24000 3000
wages payable 6000 2500 3500
income tax payable 3000 4500 -1500
note payable 20000 20000 0
ordinary shares 123000 98000 25000
retained earnings 94000 75000 19000
total Liabilities and shareholders' equity 273000 224000 49000


Additional info:
1. Fixed assets with a book value of $10,000 and original cost of $20,000 were sold for
their book value
2. Investments with an original cost of $12,000 were sold for cash

==================================

My Ans:

cashflow statement
==============
net profit before tax 36000
depreciation 11000
decrease in account receivable 14000
increase in account payable 3000
increase in wages payable 3500
loss on sale of investments 3000


increase in inventories -28000
increase in prepaid advertising -3000


cash generated from operations
income taxes paid -18500
cash flow from investing activities:
long term investments -12000

cash flow from financing activities:
ordinary shares 25000
net decrease/increase in cash 34000

[wanye]

should I use net income or net profit before taxes for the cash flow statement? How to determine?

what does this means? How shld I input the following into cashflow statement:

Fixed and Equipment net, Ending Balance: 106000 Beginning Balance: 69000 Net Increase:37000.
Fixed assets with a book value of $10,000 and original cost of $20,000 were sold for
their book value

For long term investments, Ending Balance: 30000 Beginning Balance: 42000 Net decrease:12000 .
Investments with an original cost of $12,000 were sold for cash