Cash flow statement for Contest Company, for the year ended December 31, 2015, on thespreadsheet provided.

Comment on the company's financial performance with respect to major items affecting cash.

U7A7 Assignment 1

Contest Company

Comparative Balance Sheet

December 31, 2014 and 2015

Assets 2015 2014

Cash $63,000 $24,000

Accounts Receivable 48,000 54,000

Merchandise Inventory 126,000 108,000

Equipment 108,000 90,000

Accumulated Amortization (24,000) (18,000)

Total $321,000 $258,000

Liabilities and Equity

Accounts Payable $42,000 $30,000

Taxes Payable 6,000 12,000

Dividends Payable 9,000 -

Common Stock 198,000 180,000

Retained Earnings 66,000 36,000

Total $321,000 $258,000

Additional Information:

• From the Income Statement, there is a net income of $51 000 in 2015.
• Equipment was amortized for $9 000 in 2015.
• New equipment costing $21 000 was purchased.
• An old, fully amortized piece of equipment that cost $3 000 was discarded; its cost and accumulated amortization were removed from the accounts.
• 1 500 shares of stock were sold and issued at $12 per share.
• The company declared $30 000 of cash dividends during the year and paid $21 000 of dividends.