Problem 3-3

Latigoe Inc. has the following financial statements for 20X8. In addition, the company paid stockholders dividends of $2.9 million and received $4.8 million from the sale of new stock. No fixed assets were retired during the year. (Hint: That implies that fixed asset purchases and depreciation are equal to the changes in the gross fixed asset and accumulated depreciation accounts.)

Latigoe Inc.
Balance Sheet
For the period ended 12/31/X8 ($000)
				ASSETS
		12/31/X7			12/31/X8
Cash		$	3260		$	2658
Accounts receivable			7920			5635
Inventory			12408			13653
CURRENT ASSETS		$	23588		$	21946
Fixed assets
Gross		$	66098		$	72166
Accumulated deprec.			(47032)			(51340)
Net		$	19066		$	20826
TOTAL ASSETS		$	42654		$	42772
				LIABILITIES
Accounts payable		$	1680		$	2166
Accruals			924			735
CURRENT LIABILITIES		$	2604		$	2901
Long-term debt		$	9007		$	1352
Equity			31043			38519
TOTAL CAPITAL		$	40050		$	39871
TOTAL LIABLITIES AND EQUITY		$	42654		$	42772

Latigoe Inc.
Income Statement
For the period ended 12/31/X8
($000)
Sales		$	67972
COGS			35393
Gross margin		$	32579
Depreciation			4308
Expense		$	17892
EBIT		$	10379
Interest			1096
EBT		$	9283
Tax			3707
Net income		$	5576

Construct Latigoe's statement of cash flows for 20X8. Enter your answers in thousands. For example, an answer of $1.2 million should be entered as 1200, not 1200000. Use a minus sign, to indicate any decreases in cash or cash outflows.

Latigoe Inc. Statement of Cash Flows For the period ended 12/31/X8 ($000)
OPERATING ACTIVITIES:
	Net Income	$ fill in the blank 1
	Depreciation	$ fill in the blank 2
	Net changes in current accounts	$ fill in the blank 3
Cash from Operating Activities		$ fill in the blank 4
INVESTING ACTIVITIES:
	Increase in Fixed Assets	$ fill in the blank 5
Cash from Investing Activities		$ fill in the blank 6
FINANCING ACTIVITIES:
	Decrease in Debt	$ fill in the blank 7
	Dividends Paid	$ fill in the blank 8
	Sale of Stock	$ fill in the blank 9
Cash from Financing Activities		$ fill in the blank 10
NET CASH FLOW		$ fill in the blank 11

Reconciliation
	Beginning Cash	$ fill in the blank 12
	Net Cash Flow	$ fill in the blank 13
	Ending Cash	$ fill in the blank 14