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 indirect method only, complete the following Statement of Cash Flows:

Small Business Client Balance Sheet At December 31 Small Business Client Income Statement For the Year Ended December 31 Sales Revenues Cost of goods sold Depreciation expense Other Operating Expenses Operating Income Interest Expense Income before income taxes Income tax expense Net Income $ $ $ $ $ $ $ $ $ 102,000.00 77,400.00 10,000.00 1,800.00 12,800.00 2,800.00 10,000.00 3,500.00 6,500.00 ASSETS Current Year Prior Year Change Cash $ 8,000.00 $ 12,000.00 Accounts Receivable $ 16,900.00 $ 8,500.00 Inventories $ 37,600.00 $ 25,900.00 Total Current Assets $ 62,500.00 $ 46,400.00 Property, Plant, Equipment $ 105,000.00 $ 105,000.00 Less: Accumulated Depreciation $ (20,000.00) $ (10,000.00) Total Assets $ 147,500.00 $ 141,400.00 LIABILITIES Accounts Payable $ 31,400.00 $ 30,000.00 Income Taxes Payable $ 3,000.00 $ 4,000.00 Interest Payable $ 4,000.00 $ 1,800.00 Other Accrued Liabilities $ 11,000.00 $ 14,000.00 Total Current Liabilitites $ 49,400.00 $ 49,800.00 Long-Term Debt $ 40,000.00 $ 40,000.00 Total Liabilities $ 89,400.00 $ 89,800.00 STOCKHOLDER'S EQUITY Contributed Capital $ 10,000.00 $ 10,000.00 Retained Earnings $ 48,100.00 $ 41,600.00 Total Stockholder's Equity $ 58,100.00 $ 51,600.00 Total Liabilities and Stockholder's Equity $147,500.00 $ 141,400.00 Skills Case 12-7 Small Business Client Statement of Cash Flows For the Year Ended December 31 Cash flows from operating activities Net Income Depreciation changes in current assets and current Liabilities Accounts Receivable Inventories Accounts Payable Income Tax Payable Interest Payable Other Accrued Liabilities Net Cash flow used by operating activities