Cash Flow From Divisions. Wear-Well Fabrics Company, Inc. operates with three divisions: an apparel division, a sports division, and a novelty division. Each division is autonomous with a minimum of control exercised by the corporate headquarters. At the end of each fiscal year, divisions are expected to remit to corporate offices half of the cash flow generated by operations in that division. This requirement may be suspended if it can be shown that the funds are needed by the division for future operations.

Account balances (in thousands) traceable to each division as of February 1, 1998, for the fiscal year, and as of January 31, 1999, are:

\section*{Required:}
1. Prepare a statement that will show the cash flows from operations and investing for each division and for the company in total for the year.
2. Determine the amount to be remitted to corporate offices.
3. Comment on the possible impacts of this system of corporate cash control.

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February 1, 1998: Accounts receivable Inventories Equipment, net. Accounts payable Accrued expenses For the fiscal year: Net sales... Cost of goods sold Cash operating expenses Depreciation expense Interest expense Loss on sale of fixtures Income taxes. Total expenses Net income.. Equipment purchases Apparel Sports Novelty $ 326 $ 68 $ 89 636 240 277 784 472 217 502 145 103 32 15 15 $ 3,670 $1,720 $ 840 $2,936 $1,204 $ 504 342 286 138 65 73 34 30 15 6 37 0 0 130 71 79 $ 3,540 $1,649 $ 761 $ 130 $ 71 $ 79 $ 96 $ 29 $ 19 January 31, 1999: Accounts receivable $ 390 $ 105 $ 115 Inventories 630 368 301 Equipment, net. 759 423 202 Accounts payable Accrued expenses 432 155 70 55 20 4