Question
NOTE : Please show work and reasoning. Smuk had net sales of 1,311 million from selling products for the year ending april 30, 2003. The
NOTE : Please show work and reasoning.
Smuk had net sales of 1,311 million from selling products for the year ending april 30, 2003. The income statement showed operating expenses of 1,147 million, other expenses of 9 million, and income taxes of 59 million. Assume depreciation and amortization affect operating expenses and that other noncash items affect other expenses. The company's statement of cash flows, prepared under the indirect method, also contained the following items (in millions) : Issuance of common stock 7 Dividends paid (34) Additions to property, plant, and equipment (49) Business acquired (11) Disposal of property, plant, and equipment 7 NET INCOME 96 Depreciation and amortization 34 CHANGES IN OPERATING ASSETS AND LIABILITIES : Trade receivables (43) Inventories (12) Accounts payable and accrued liabilities 56 Income taxes 23 Other 12 1. Prepare a statement of cash flows for Smuk using the direct method. Omit the schedule reconciling net income to net cash provided by operating activities. 2. Discuss the relation between operating cash flow and investing and financing needs.
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