Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Excel Online Structured Activity: Statement of cash flows You have just been hired as a financial analyst for Barrington Industries. Unfortunately, company headquarters (where all

image text in transcribed
image text in transcribed
Excel Online Structured Activity: Statement of cash flows You have just been hired as a financial analyst for Barrington Industries. Unfortunately, company headquarters (where all of the firm's records are kept) has been destroyed by fire. So, your first job will be to recreate the firm's cash flow statement for the year just ended. The firm had $100,000 in the bank at the end of the prior year, and its working capital accounts except cash remained constant during the year. It earned $5 million in net income during the year but paid $700,000 in dividends to common shareholders. Throughout the year, the firm purchased $5.4 million of machinery that was needed for a new project. You have just spoken to the firm's accountants and learned that annual depreciation expense for the year is $440,000; however, the purchase price for the machinery represents additions to property, plant, and equipment before depreciation. Finally, you have determined that the only financing done by the firm was to issue long-term debt of $1 million at a 6% interest rate. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet What was the firm's end-of-year cash balance? Recreate the firm's cash flow statement to arrive at your answer. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar, if necessary B D m $100,000.00 $0.00 $5,000,000.00 $700,000.00 $5,400,000.00 $440,000.00 $1,000,000.00 6.00% A 1 Statement of cash flows 2 3 Cash at the Beginning of Year 4 Change in Net Operating Working Capital Except Cash 5 Net Income 6 Common Dividends 7 Machinery Equipment Purchases 8 Depreciation Expense 9 Long-Term Debt 10 Interest Rate on Long-Term Debt 11 12 Statement of Cash Flows 13 I. Operating Activities 14 Net income 15 Depreciation expense 16 Change in net operating working capital except cash 17 Net cash provided by (used in) operations 18 19 II. Long-Term Investing Activities 20 Additions to property, plant and equipment 21 Net cash used in investing activities 22 23 III. Financing Activities 24 Increase in long-term debt 25 Payment of common dividends 26 Net cash provided by financing activities 27 28 IV. Summary 29 Net increase (decrease) in cash 30 Cash at beginning of year 31 Cash at end of year Formulas #N/A #N/A $0.00 #N/A #N/A #N/A #N/A #N/A #N/A #N/A $100,000.00 #N/A

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Covered Calls Option Trading Strategy

Authors: Andrew P.C.

1st Edition

1549658697, 978-1549658693

More Books

Students also viewed these Finance questions