QUESTION 2

1. The Weeknd 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.)

   Weeknd Inc.
   Balance Sheet
   For the period ended 12/31/X8 ($000)
   				ASSETS
   		12/31/X7			12/31/X8
   Cash		$	3225		$	2617
   Accounts receivable			7961			5678
   Inventory			12408			13653
   CURRENT ASSETS		$	23594		$	21948
   Fixed assets
   Gross		$	66098		$	72166
   Accumulated deprec.			(47038)			(51342)
   Net		$	19060		$	20824
   TOTAL ASSETS		$	42654		$	42772
   				LIABILITIES
   Accounts payable		$	1667		$	2227
   Accruals			951			702
   CURRENT LIABILITIES		$	2618		$	2929
   Long-term debt		$	9007		$	1352
   Equity			31029			38491
   TOTAL CAPITAL		$	40036		$	39843
   TOTAL LIABLITIES AND EQUITY		$	42654		$	42772

   Weeknd Inc.
   Income Statement
   For the period ended 12/31/X8
   ($000)
   Sales		$	67954
   COGS			35278
   Gross margin		$	32676
   Depreciation			4304
   Expense		$	18007
   EBIT		$	10365
   Interest			1096
   EBT		$	9269
   Tax			3707
   Net income		$	5562

   Construct Weeknd's statement of cash flows for 20X8. Enter your answers in thousands, without commas or "$". 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.

   Weeknd Inc. Statement of Cash Flows For the period ended 12/31/X8 ($000)
   OPERATING ACTIVITIES:
   	Net Income	$______
   	Depreciation	$______
   	Net changes in current accounts	$______
   Cash from Operating Activities		$______
   INVESTING ACTIVITIES:
   	Increase in Fixed Assets	$______
   Cash from Investing Activities		$______
   FINANCING ACTIVITIES:
   	Decrease in Debt	$______
   	Dividends Paid	$______
   	Sale of Stock	$______
   Cash from Financing Activities		$______
   NET CASH FLOW		$______

   Reconciliation
   	Beginning Cash	$______
   	Net Cash Flow	$______
   	Ending Cash	$______