4. Now that Allisha McKay (see Question 3) has compiled the sources and uses of funds information she needs, she is ready to prepare The Fred Proffet Company's SCF for this year. Help her complete the company's SCF by using the information taken from the following Condensed Income Statement and Statement of Retained Earnings for This Year, as well as This Year and Last Year's Balance Sheets show in the previous Question 3. Then, answer the questions that follow: The Fred Proffet Company Condensed Income Statement and Statement of Retained Earning For the Period: January 1 through December 31. This Year SALES Cost of Sales Labor PRIME COSTS Other Operating Expenses (excluding depreciation) Depreciation OPERATING INCOME Interest $5.200.000 1,560,000 1.456.000 3,016,000 1.404.000 105.000 675,000 249.000 133.000 175.000 260.000 INCOME BEFORE INCOME TAXES Income Taxes NET INCOME STATEMENT OF RETAINED EARNINGS Retained Earnings, December 31, Last Year Net Income for This Year Subtotal Cash Dividends Paid This Year Retained Earnings, December 31, This Year 1.146.000 260.000 1.06.000 156,000 $1,250,000 The Fred Proffet Company Statement of Cash Flows December 31, This Year NET CASH FLOW FROM OPERATING ACTIVITIES Net Income Adjustments to reconcile net income to net cash flows from operating activities Depreciation Increase in Net Receivables Decrease in Inventories Decrease in Accounts Payable Decrease in Other Current Liabilities Net Cash Flow from Operating Activities NET CASH FLOW FROM INVESTING ACTIVITIES Decrease in Marketable Securities Increase in Property and Equipment Net Cash Flow from Investing Activities shown (Continued) NET CASH FLOW FROM FINANCING ACTIVITIES Decrease in Notes Payable Increase in Long Term Debt Increase in Capital Stock (Common Stock + Paid in Capital) Dividends Paid Net Cash Flow from Financing Activities Net Increase in Cash This Year Cash at the beginning of This Year Cash at the end of This Year SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the year for Interest Income Taxes a. What is Allisha's proper entry for "Net Cash Flow from Operating Activities"? b. What is Allisha's proper entry for "Net Cash Flow from Investing Activities"? c. What is Allisha's proper entry for "Net Cash Flow from Financing Activities"? d. What is Allisha's proper entry for "Net Increase in Cash This Year"? e. Since all changes in cash are accounted for in the SCF, what is the purpose of the "Supplementary Disclosure of Cash Flow Information portion of the statement? Chapter 5, Question 4 The Fred Proffet Company Condensed Income Statement and Statement of Retained Earnings For the Period: January 1 through December 31, This Year SALES Cost of Sales Labor PRIME COSTS Other Operating Expenses (excluding depreciation) 2 Depreciation OPERATING INCOME Interest INCOME BEFORE INCOME TAXES Income Taxes NET INCOME $5,200,000 1,560,000 1,456,000 3,016,000 1,404,000 105,000 675,000 242,000 433,000 173,000 260,000 STATEMENT OF RETAINED EARNINGS Retained Earnings, December 31, Last Year Net Income for This Year Subtotal Cash Dividends Paid This Year Retained Earnings, December 31, This Year 1,146,000 260,000 1,406,000 156,000 1,250,000 F32 A B 26 27 The Fred Proffet Company 28 Statement of Cash Flows 29 December 31, This Year 30 NET CASH FLOW FROM OPERATING ACTIVITIES 31 Net Income Adjustments to reconcile net income to net cash flows from 32 operating activites 33 Depreciation 34 Increase in Net Receivables 35 Decrease in Inventories 36 Decrease in Accounts Payable 37 Decrease in Other Current Liabilities 38 Net Cash Flow from Operating Activities 39 40 NET CASH FLOW FROM INVESTING ACTIVITIES 41 Decrease in Marketable Securities 42 Increase in Property and Equipment 43 Net Cash Flow from Investing Activities 44 45 NET CASH FLOW FROM FINANCING ACTIVITIES 46 Decrease in Notes Payable 47 Increase in Long-Term Debt 48 Increase in Capital Stock (Common Stock + Paid in Capital) 49 Dividends Paid 50 Net Cash Flow from Financing Activities 51 52 Net Increase in Cash This Year 53 Cash at the beginning of This Year 54 Cash at the end of This Year 55 56 SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION 57 Cash paid during the year for 58 Interest 59 Income Taxes 60 01 03 04 05 06 07 Bonus QB Type here to search O RI 3. The Fred Proffet Company has been in the contract food service management business for many years. Their clients choose the Proffet Company for its creativity and attention to detail. Allisha McKay is the person who prepares the summary of sources and uses of funds for the Proffet Company Help her do that by using the balance sheets that follow to calculate the company's sources and uses of funds, using arrows to indicate the differences where appropriate, and then answer the questions that follow. The Fred Proffet Company Balance Sheets December 31, Last Year and This Year Last Year ($) This Year ($) 1 ! Sources Uses ASSETS Current Assets Cash Marketable Securities Net Receivables 336,000 1,240,000 1,520,000 844,000 350.000 1.200,000 1,550,000 830.000 Inventories continued) 188 Chapter 5 The Statement of Cash Flows 1.000 3.930,000 Total Current Assets Property and out 1.300.000 1.800.000 $95.000 Depreciation Net Property and Equipment 70,000 975.000 4.805.000 TOTAL ASSETS LIABILITIES AND OWNERS EQUITY CaLatitis Accounts de Notes able Other Current Loties Total Current Llables 584.000 191.000 186 000 1,355.000 525.000 30,000 30.000 Long Term Liabilities Long Tena Debt Total Liabilities 720,000 2.070,000 1.100.000 2.655,000 Own Equity Common Stock Paldin Capital Reuined Earnio Total Owners' Equity 300,000 1.200,000 1.146.000 320,000 1.280,000 1.250.000 TOTAL LIABILITIES AND OWNERS' EQUITY 905,000 TOTAL SOURCES AND USES OF FUNDS 2. Did the change in cash reflecta source or a use of fundse What was the amount of that change b. Did the change in net receivables reflect a source or use of fundse What was the amount of that change c. Did the change in nato payable reflect one or of funds? What was the amount of that change d. Did the change in retained earning reflect a source of a ne of funds What was the amount of that change e. What was the total amount of sources and use of funds 4. Now that Allisha Mckay (see Question 3) has compiled the sources and uses of funds information she needs he ready to prepare The Fred Proffet Company's SCF for this year Help her complete the company's SCF by using the information taken from the following Condensed lecote in the previous Questions. Then, answer the questions that follow: Statement and Statement of Retained Earnings for This Year, as well as This year and Lot Year's Balance Shes