Youve recently been hired by B2B Consultants to provide financial advisory services to small business managers. B2Bs clients often need advice on how to improve their operating cash flows and, given your accounting background, youre frequently called upon to show them how operating cash flows would change if they were to speed up their sales of inventory and their collections of accounts receivable or delay their payment of accounts payable. Each time youre asked to show the effects of these business decisions on the cash flows from operating activities, you get the uneasy feeling that you might inadvertently miscalculate their effects. To deal with this once and for all, you e-mail your friend Owen and ask him to prepare a template that automatically calculates the net operating cash flows from a simple comparative balance sheet. You received his reply today.

Required:

Using the direct method only, complete the following Statement of Cash Flows

Small Business Client Small Business Client Balance Sheet Income Statement At December 31 For the Year Ended December 31 $102,000.00 Change Sales Revenues ASSETS Current Year Prior Year 8,000.00 $ Cash 12,000.00 Cost of goods sold 77,400.00 Accounts Receivable 16,900.00 $ Depreciation expense 10,000.00 8,500.00 37,600.00 $ $ Other Operating Expenses 1,800.00 Inventories 25,900.00 62,500.00 $ $ 105,000.00 $ (20,000.00) $ $147,500.00 Total Current Assets 46,400.00 Operating Income 12,800.00 $ Property, Plant, Equipment Less: Accumulated Depreciation 105,000.00 Interest Expense 2,800.00 $ (10,000.00) Income before income taxes 10,000.00 Total Assets Income tax expense 141,400.00 3,500.00 Net Income LIABILITIES 6,500.00 Accounts Payable Income Taxes Payable Interest Payable 31,400.00 $ 30,000.00 3,000.00 $ 4,000.00 $ 4,000.00 1,800.00 11,000.00 $ Other Accrued Liabilities 14,000.00 49,400.00 $ 40,000.00 $ Total Current Liabilitites 49,800.00 Long-Term Debt 40,000.00 Total Liabilities 89,400.00 $ 89,800.00 STOCKHOLDER'S EQUITY Contributed Capital Retained Earnings 10,000.00 $ 10,000.00 48,100.00$ $58,100.00 $ Total Liabilities and Stockholder's Equity 147,500.00 $ 41,600.00 Total Stockholder's Equity 51,600.00 141,400.00 Skills Case 12-8 Small Business Client Statement of Cash Flows For the Year Ended December 31 Cash flows from operating activities Cash collected from customers Cash paid to suppliers for inventory Cash paid for other operating expenses Cash paid for Interest Cash paid for Income Taxes Net Cash flow from operating activities