Case 112 Amerbran Company (A)* Amerbran Company was a diversified company that sold various consumer products, including food, tobacco, distilled products, and personal care products and financial services. Financial statements for the company are shown in Exhibit EXHIBIT 1 AMERBRAN COMPANY Balance Sheets As of December 31, 20x1 and 20x0 (in thousands) 20x1 20x0 Assets Cash $ 28,912 $ 23,952 Accounts receivable 756,152 687,325 Inventories 1,244,912 1,225,402 Prepaid expenses ____7_6_,_1_4_0_ ____7_7_,_1_6_7_ Total current assets 2,106,116 2,013,846 Investments _1_,_1_1_6_,_5_3_4_ _1_,_0_5_8_,_6_3_7_ Property, plant, and equipment, at cost 1,566,268 1,366,719 Less accumulated depreciation ___7_2_3_,_4_4_2_ ___6_4_5_,_7_3_4_ Net property, plant, and equipment 842,826 720,985 Goodwill 645,210 577,606 Other assets ___1_1_5_,_8_2_6_ ____6_2_,_3_7_4_ Total assets $__4__,__8__2__6__,__5__1__2__ $__4__,__4__3__3__,__4__4__8__ Liabilities and Shareholders Equity Accounts payable $ 271,452 $ 238,377 Short-term debt 430,776 351,112 Accrued expenses payable ___9_2_2_,_9_9_0_ ___7_2_8_,_2_6_2_ Total current liabilities 1,625,218 1,317,751 Long-term liabilities ___8_8_0_,_6_7_4_ ___9_3_2_,_8_2_8_ Total liabilities _2_,_5_0_5_,_8_9_2_ _2_,_2_5_0_,_5_7_9_ Convertible preferred stock 33,828 42,611 Common stock, at par 322,834 161,417 Additional paid-in capital 53,641 57,072 Treasury stock, at cost (110,948) (102,705) Retained earnings _2_,_0_2_1_,_2_6_5_ _2_,_0_2_4_,_4_7_4_ Total shareholders equity _2_,_3_2_0_,_6_2_0_ _2_,_1_8_2_,_8_6_9_ Total liabilities and shareholders equity $__4__,__8__2__6__,__5__1__2__ $__4__,__4__3__3__,__4__4__8__ Income Statement For the year ended December 31, 20x1 (in thousands) Sales revenues, net $__7_,_6_2_2_,_6_7_7_ Cost of sales 2,803,623 Excise taxes on goods sold __2_,_8_8_7_,_6_1_6_ Gross margin 1,931,438 Selling, general, and administrative expenses __1_,_3_2_8_,_1_0_7_ Income before income taxes 603,331 Provision for income taxes ____2_7_4_,_5_5_8_ Net income $____3_2_8_,_7_7_3_ The 20x1 financial statements reflect the following transactions (dollar amounts are in thousands): 1. Depreciation and amortization expense was $115,974. 2. Net income included a loss of $66,046 resulting from the write-off of some obsolete equipment. The equipment had not yet been disposed of. 3. Net income included $59,610 from Amerbrans investment in a subsidiary; none of this income had been received in cash. 4. The year-end balance in Deferred Income Taxes was $17,548 lower than it was at the start of the year. 5. New property, plant, and equipment purchases totaled $260,075, all paid for with cash. Disposals of fixed assets generated $33,162 cash proceeds. 6. Acquisition of another company that was made for cash resulted in additional depreciable assets of $31,691 and goodwill of $102,030. 7. Cash dividends were paid in the amount of $216,158. 8. The firmdeclared and issued a 100 percent common stock dividend effective September 10, 20x1; that is, each shareholder received as a dividend a number of shares equal to his or her holdings prior to the dividend. The newly issued shares were valued at par in recording this transaction. 9. The firm spent $30,609 to purchase treasury stock on the open market. Some of the shares so acquired were reissued to certain employees as a bonus. 10. The firm increased its short-term debt as indicated on the balance sheet in Exhibit 1. Long-term borrowings decreased by $34,606. Question Prepare a statement of cash flows for the year 20x1. In order for your statement to show the correct increase in cash ($4,960), you will need to add a miscellaneous activities category; this will capture several transactions that were not described because they are more complicated than those covered in the text.