Statement of cash flow question?

The following income statement and balance sheet information are available for two firms, Firm A and Firm B.

(a) Calculate the amount of dividends Firm A and Firm B paid using the information given.

(b) Prepare a statement of cash flows for each firm using the indirect method.

(c) Analyze the difference in the two firms.

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I am trying to do this question since 2 days but can't do it correctly :(

1 Answer

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  • 8 years ago
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    a) Net income - Changes in retained earning = Divideneds paid

    75000-70000=5000 (A)

    75000-40000=35000 (B)

    b)

    Operating A B

    Net income 75000 75000

    Depre Expense 10000 30000

    A/R (40000) (5000)

    Inventory (40000) 10000

    A/P (20000) (5000)

    Net Cash flow (15000) 105000

    from Ops

    Investing

    PPE (20000) (70000)

    Financial

    Note Payable 17000 2000

    Debt 20000 (10000)

    Tax 3000 18000

    Dividend (5000) (35000)

    Net Cash flow from 35000 (25000)

    Financial

    Net Cash Flow from Operating, Investing and Financial Activity

    -15,000 -20000 +35000 = 0 (A)

    105000 -70000 -25000 = 10000 (B)

    Source(s): My brain
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