Epsilon Retail Ltd.

Scenario: Prepare a Cash Flow Statement

Data:

• Operating Activities:
  • Net Income: $80,000
  • Depreciation Expense: $20,000
  • Increase in Accounts Receivable: $10,000

• Investing Activities:
  • Purchase of Equipment: $30,000

• Financing Activities:
  • Issuance of Long-term Debt: $50,000
  • Payment of Dividends: $10,000

Requirements:

1. Prepare the statement of cash flows for the year ended December 31, 2023.
2. Classify cash flows into operating, investing, and financing activities.
3. Analyze the company’s cash position and liquidity based on the statement of cash flows.