Sunset boards, Inc., Is a small company that manufactures and sells surfboards in Malibu. Ted Marx, the founder of the company is in charge of the design and sale of surfboards, but his background is in surfing, not business. As a result the company's financial records are not well-maintained. The initial investment in Sunset boards was provided by Todd and his friends and family. Because the initial investment was relatively small, and the company has made surfboards only for its own store, the investors haven't required detailed financial statements from tad. But thanks to Word of mouth among professional surfers, cells have picked up recently, and Ted is considering a major expansion. His plans include opening another surfboard store in Hawaii, as well as supplying his sticks (surfer lingo for boards) to other sellers. Todd's expansion plans require a significant investment, which he plans to finance with a combination of additional funds from outsiders plus some money borrowed from banks. Naturally, the new investors and creditors require more organized and detailed financial statements than has previously repaired. At the urging of his investors, Todd has hired financial analysis Christina Jennings to evaluate the performance of the company over the past year. After routing through old bank statements, sales receipts, tax returns, and other records, Christina has assembled the following information:

Sunset boards currently pay out 40% of net income as dividends to tad and they are their original investors, and it has a 21% tax rate. You are Christinas assistant, and she has asked you to prepare the following

1. An income statement for 2020 and 2021
2. A Balance sheet for 2020 and 2021
3. Operating cash flow for each year
4. Cash flow from assets for 2021
5. Cash flow to creditors for 2021
6. Cash flow to stockholders for 2021

Questions

1. How would you describe sunset boards cash flow for 2021? Write a brief discussion
2. In light of your discussion in the previous question, what do you think about Tad's expansion plans?

PLEASE INCLUDE ALL STEPS AND CHARTS!!

\begin{tabular}{|lrr|} \hline & 2020 & 2021 \\ \hline Cost of goods sold & $306,726 & $387,290 \\ Cash & 44,261 & 66,870 \\ Depreciation & 86,590 & 97,871 \\ Interest expense & 18,824 & 21,576 \\ Selling and administrative & 60,322 & 78,732 \\ Accounts payable & 31,423 & 53,181 \\ Net fixed assets & 382,014 & 465,426 \\ Sales & 601,729 & 733,469 \\ Accounts receivable & 31,363 & 40,681 \\ Notes payable & 35,654 & 38,929 \\ Long-term debt & 192,827 & 210,408 \\ Inventory & 60,382 & 81,209 \\ New equity & 0 & 23,400 \\ \hline \end{tabular}