Question 1b

1. (50 pts) Technology Corporation increased its sales from $375,000 in 2012 to S 450,000 in2013 as shown in the firm's income statements presented below. LaAnn Sands, CEO and founder of the fim, expressed concern that the cash account and the firm's cash declined substantially between 2012 and 2013. Salza's complete balance sheets are also shown. Ms. Sands is seeking your assistance in the preparation of a statement of cash flows for Salza Technology SALZA TECHNOLOGY CORPORATION ANNUAL INCOME STATEMENT (IN STHOUSANDS) 2012 5375 2013 5450 270 180 -46 .30 150 46 Net sales Less Cost of goods sold Gross profit Less: Operating expenses Less Depreciation Less Interest Income before taxes Less Income taxes Net income Cash dividends 14 75 S 35 100 . 5.70 520 BALANCE SHEETS AS OF DECEMBER 31 (IN S THOUSANDS) 2013 $ 16 NO 204 2012 $19 56 151 240 200 .95 105 5345 Cash Accounts receivables Inventories Total current assets Gross fixed assets Less accumulated depreciation Net fixed Total 100 290 -125 165 $ 465 530 20 Account payable Bank loan Accrued liabilities Total current liabilities Long-term debt 545 27 23 95 15 15 Common stock Retained earnings Total liabilities and equity 85 185 SJ45 120 235 5465 1 A. (20 pts) Prepare a statement of cash flows for 2013 for Salza Technology Corporation. B. (15 pts) LaAnn Sands wants to conduct revenue breakeven analyses of Salza Technology Corporation for 2013. For 2013, the firm's cost of goods sold is considered to be variable costs, and operating expenses are considered to be fixed cash costs. Depreciation expenses in 2013 are expected to be fixed costs. Interest expenses in 2013 are expected to be fixed costs. Calculate Salza's EBDAT breakeven in terms of survival revenues for 2013