STATEMENT OF CASH FLOWS:

You have just been hired as a financial analyst for Barrington Industries. Unfortunately, company headquarters (where all of the firms records are kept) has been destroyed by fire. So, your first job will be to recreate the firms cash flow statement for the year just ended. The firm had $100,000 in the bank at the end of the prior year, and its working capital accounts except cash remained constant during the year. It earned $5 million in net income during the year but paid $800,000 in dividends to common shareholders. Throughout the year, the firm purchased $5.5 million of property, plant, and equipmentthe majority having a useful life of more than 20 years and falling under the alternative depreciation system. You have just spoken to the firms accountants and learned that the annual depreciation expense for the year is $450,000. The purchase price for the property, plant, and equipment represents additions before depreciation. Finally, you have determined that the only financing done by the firm was to issue long-term debt of $1 million at a 6% interest rate. What was the firms end-of-year cash balance? Recreate the firms cash flow statement to arrive at your answer.