CHAPTER CASE CASH FLOWS AND FINANCIAL STATEMENTS AT SUNSET BOARDS, INC. unset Boands is a small company that manufisctures and sells surfboards in Malibu. Tad Marks, the founder of the company, is in charge of the design and sale of the surfboards, but his background is in surfing, not business. As a result, the company's financial records are not well maintained. The initial investment in Sunset Boards was provided by Tad and his friends and family. Because the initial investment was relatively small, and the company has made surfboards only for its own store, the investors haven't required detailed financial statements from Tad. But thanks to word of mouth among professional surfers, sales have picked up recently, and Tad is considering a major expansion. His plans include opening another surfboard store in Hawaii, as well as supplying his "sticks" (surfer lingo for boards) to other sellers. Tad's expansion plans require a significant investment, which he plans to finance with a combination of additional funds from outsiders plus some money borrowed from banks Naturally, the new investors and creditors require more organized and detailed financial statements than Tad has previously prepared. At the urging of his investors, Tad has hired financial analyst Jameson Reid to evaluate the performance of the company over the past year After rooting through old bank statements, sales receipts, tax returns, and other records Jameson has assembled the following information: 2015 2016 $203,963 29,429 57,576 12,530 40,110 52,015 254,017 400,111 20,854 23.708 128,218 43.884 $257,528 31,267 65,076 14,345 52.351 57,708 316,825 487,712 27.050 25,885 143,971 60,222 Cost of goods sold Cash on Interest expense Selling & administrative expenses Accounts payable Net fixed assets Sales Accounts receivable Notes payable Long-term debt Inventor Equity (Com. Stock Retained Earn.) There was $24,192 in new equity (contributed capital) added in 2016 Page l