Please see the attached pictures. These questions are related to managerial finance.

Unit 2 Financial Statements, Taxes, and Cashflows - Read-only Sunset Boards is a small company that manufactures and sells Sunset Boards currently pays out 50 percent of net income surfboards in Malibu. Tad Marks, the founder of the company, as dividends to Tad and the other original investors, and it has is in charge of the design and sale of the surfboards, but his a 20 percent tax rate. You are Christina's assistant, and she has background is in surfing, not business. As a result, the com- asked you to prepare the following: pany's financial records are not well maintained. 1. An income statement for 2010 and 2011. The initial investment in Sunset Boards was provided by Tad and his friends and family. Because the initial investment 2. A balance sheet for 2010 and 2011. was relatively small, and the company has made surfboards 3. Operating cash flow for each year. only for its own store, the investors haven't required detailed 4. Cash flow from assets for 2011. financial statements from Tad. But thanks to word of mouth 5. Cash flow to creditors for 2011. among professional surfers, sales have picked up recently, and 6. Cash flow to stockholders for 201 1. Tad is considering a major expansion. His plans include open- ing another surfboard store in Hawaii, as well as supplying his "sticks" (surfer lingo for boards) to other sellers. QUESTIONS Tad's expansion plans require a significant investment, 1. How would you describe Sunset Boards' cash flows for which he plans to finance with a combination of additional 2011? Write a brief discussion. funds from outsiders plus some money borrowed from banks. 2. In light of your discussion in the previous question, what Naturally, the new investors and creditors require more orga- do you think about Tad's expansion plans? nized and detailed financial statements than Tad has previ- ously prepared. At the urging of his investors, Tad has hired financial analyst Christina Wolfe to evaluate the performance of the company over the past year CA 2 23:57Cost of goods sold Cash Depreciation Interest expense Selling and administrative Accounts payable Net fixed assets Sales Accounts receivable Notes payable Long-term debt Inventory New - $ 163,849 23,643 46,255 10,056 32,223 41 ,786 204,068 321 ,437 16,753 19,046 103,006 32,255 0 $ 206,886 35,721 52,282 1 1 ,526 42,058 47,325 248,625 391 ,810 21 ,732 20,796 1 16,334