John Delivery services Ltd. Is a company dedicated to the delivery of merchandises purchased online

The company started the year 2019 with a total fleet of 5 cars purchased on 1^st of January 2018 for a total amount of 100,000 and 3 trucks purchased on 1^st of January 2017 for a total amount of 180,000. All cars have an estimated useful life of 5 years whereas trucks have an estimated useful life of 6 years. All vehicles have a salvage value of 10% of its cost. The depreciation method is the straight line method.

At 1^st of January 2019 the accountant of the company realized that the useful life of the trucks should be lowered to 5 years in total taking into account the intensive use made of the vehicles.

In order to be able to respond to the dramatic increase of job orders from the main clients, the company decides on 1^st of March to acquire 10 new trucks for a total amount of 500.000. The trucks will have a useful life of 5 years, and an estimated salvage value of 10%. The accountant of the company decided that regarding these last trucks purchased, the depreciation method should be the 200% declining balance method.

To finance this acquisition, the company will issue 50.000 preferred stocks with 10 par value and 11% dividend rate.

At 1^st of January 2019, the owners equity section of the balance sheet of the company was composed as follows:

• Common stock: 100,000 shares of 1 par value common stock
• Additional paid in Capital Common stock: 150.000
• Retained earnings: 50.000

The 1^st of April 2019, a tornado destroyed part of the companys facilities, causing a total loss of 57.000

On 1^st of June 2019, John, a shareholder of the company decided to sale his 10% stake into the company. The company proceeded to the purchase of its own shares at a price per share of 10, a price 4 above the market price.

To finance this purchase the company took a 6% loan of 100,000. Interests are payable once a year every 1^st of June

During year 2019, the remaining expenses of the company were the following:

Labor costs:

• 26 drivers with an average salary of 2.100 / month. 12 of said drivers where hired on 1^st of March 2019 , plus 30% social security taxes payable the 15 first days following each month
• 1 Manager with a gross fixed salary of 60.000 / year plus 30% social security taxes payable the 15 first days following each month, and a bonus of 5% of the net income of the previous year.
• 3 mechanics with an average salary of 1.850 / month

Gasoline expense: 350,000, all paid cash

Insurance expense: 20,000 per month payable the first day of every quarter

Depreciation expense (facilities): 42.000

Miscellaneous: 146,000 paid cash

During the year 2019 the sales of the company amounted to 1,653,000. Consider that 9% of the companys sales remain unpaid at 31^st of December 2019

Income tax is payable each month of February at 25% rate on the net income of the previous year.

The company began the year 2019 with a cash balance of 125,000

Net Income of year 2018 was 160,000

Prior to the stockholders meeting, John who owns 40% of the capital of the company comes to ask you about how the different issues commented above may affect the profitability of his investment into the company

1. I need a detailed statement of cash flow for the year 2019 using the direct method and to calculate the cash balance.