Sign Graphics, Inc. Essay

277 WordsMay 17, 20152 Pages
SIGN GRAPHICS, INC. a1. Cash flows from operating activities Cash received from customers* $718,000 Less cash payments for: Purchases of merchandise** $349,600 Selling & administrative expenses*** 208,800 Interest**** 24,400 Income taxes***** 42,400 625,200 Net cash provided by operating activities $ 92,800 * Sales ($713,800) + decrease in accounts receivable ($4,200) ** Cost of goods sold ($323,000) + increase in inventory ($9,600) + decrease in accounts payable ($ 17,000) *** Selling & administrative expenses ($186,000) + increase in prepaid expenses ($1,200) + decrease in accrued liabilities ($21,600) **** Interest expense ($27,000) - increase in interest payable ($2,600) ***** Income tax expense ($36,800) + decrease in taxes payable ($5,600) a2. Cash flows from operating activities Net income $145,800 Add (deduct) items to convert net income to a cash basis Depreciation expense $ 17,000 Gain on sale of land (21,800) Decrease in accounts receivable (net) 4,200 Increase in inventory (9,600) Increase in prepaid expenses (1,200) Decrease in accounts payable (17,000) Decrease in taxes payable (5,600) Increase in interest payable 2,600 Decrease in accrued liabilities (21,600) 53,000 Net cash provided by operating activities $ 92,800 b. Cash flows from investing activities Purchase of long-term investments $(74,600) Proceeds from sale of land 76,200 Net cash provided by investing act. $ 1,600 Cash flows from financing activities Repayment of long-term note $ (49,400) Issuance of common stock* 103,800 Dividends paid (128,600) Net cash used by

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