Following is the data and financial information that you will need to answer the questions in the assignment and to ultimately prepare the Cash Flow Statement.

Information for XYZ Co.

Account Description	12/31/2017	12/31/2016
Assets
Cash & Cash Equivalents	45,000	13,000
Accounts Receivable	91,000	88,000
Equipment	139,000	22,000
Accumulated Depreciation - Equipment	(17,000)	(11,000)
Total Assets	258,000	112,000
Liabilities & Stockholders' Equity
Accounts Payable	20,000	15,000
Bonds Payable	100,000	0
Common Stock	100,000	80,000
Retained Earnings	38,000	17,000
Total Liabilities & Stockholders' Equity	258,000	112,000

Additional Information

(A) Net income for 2017 was $44,000.

(B) New equipment was purchased in 2017 but none was sold.

(C) Cash dividends of $23,000 were declared and paid in 2017.

(D) $100,000 of equipment was acquired by the issuance of Bonds Payable.

Question 1

Step 1 Prepare a Comparative Balance Sheet and compute the change (increase or decrease) in the account balances during the period. This is your anchor and the Cash Flow Statement will reflect all of these changes either in:

• The cash section (a combination of (a) Operating Activities, (b) Investing Activities, and (c) Financing Activities) or,
• A non-cash section (for Non-Cash Investing and Financing Activities)

Account Description	12/31/2017	12/31/2016	Increase (Decrease)
Assets
Cash & Cash Equivalents	45,000	13,000
Accounts Receivable	91,000	88,000
Equipment	139,000	22,000
Accumulated Depreciation - Equipment	(17,000)	(11,000)
Total Assets	258,000	112,000
Liabilities & Stockholders' Equity
Accounts Payable	20,000	15,000
Bonds Payable	100,000	0
Common Stock	100,000	80,000
Retained Earnings	38,000	17,000
Total Liabilities & Stockholders' Equity	258,000	112,000

Question 2

Step 2 The ultimate goal of the Cash Flow Statement is to determine and detail why Cash and Cash Equivalents during the period ___________________ by $___________________.

Step 3 Prepare the Operating Activities section of the Cash Flow Statement.

Description	Amount
Net Cash Provided By (Used In) Operating Activities

Step 4 Prepare the Investing Activities section of the Cash Flow Statement. Investing Activities represent either amounts that a company invests in:

(a) Itself (i.e., capital expenditures or purchases for fixed assets, purchasing another business) or the disposals/sales of fixed assets or a business, and

(b) The stock or bonds of other entities (i.e., purchasing an investment in the common stock or bonds of another company) or disposing of such investments

Description	Amount
Net Cash Provided By (Used In) Investing Activities

Step 5 Complete the Financing Activities section of the Cash Flow Statement. Financing Activities represent either amounts that:

(a) Are received from owners (i.e., capital contributions from owners or proceeds from sale of the companys stocks or bonds to 3rd parties), or distributions of cash back to owners (i.e., dividends paid to owners)

(b) A company borrows from a bank or other lender, and the principal payments made by the company to repay the loans (interest paid by the company is charged to interest expense which is a reduction of Net Income in the Operating Activities section)

Description	Amount
Net Cash Provided By (Used In) Financing Activities

Step 6 Determine if there are any Non-Cash Investing and/or Financing Activities". Non-Cash Investing and/or Financing Activities represent transactions where there was some investing and financing transaction that did not require any outlay of cash. So with a Non-Cash Investing and/or Financing Activity, some long-term asset, long-term liability, or stockholders equity is impacted through a non-cash transaction.

These non-cash transactions get reported as Non-Cash Investing and/or Financing Activities below the body of the cash transactions section of the Cash Flow Statement.

Examples of Non-Cash Investing and/or Financing Activities are:

(a) A company acquiring property or equipment by issuing some of its stock or bonds,

(b) Issuing stock (rather than paying cash) to pay off some of the companys debt.

Description

Step 7 Prepare the Cash Flow Statement for XYZ Co. for the Year Ended 12/31/17.

Cash Flows From Operating Activities
Net Cash Provided By (Used In) Operating Activities
Cash Flows From Investing Activities
Net Cash Provided By (Used In) Investing Activities
Cash Flows From Financing Activities
Net Cash Provided By (Used In) Financing Activities
Net Increase (Decrease) In Cash & Cash Equivalents
Cash & Cash Equivalents - Beginning Of Year
Cash & Cash Equivalents - End Of Year
Non-Cash Investing & Financing Activities