Comparable balance sheets are presented below: Dec. 31, 2015 Dec. 31, 2014 Assets Cash 1.2 1.9 Accounts Receivable 0.4 0.3 Inventory 1.3 1.0 Property, Plant & Equipmen 6.0 3.0 Less: Accumulated Depreciation (0.8) (0.4) 8.1 5.8 Liabilities & Stockholder's Equity Accounts Payable 2.6 2.1 Dividends Payable - - Bonds Payable 4.4 2.8 Common Stock, $1 Par Value 0.2 0.1 Paid-in Capital in Excess of Par Value 3.2 2.2 Retained Earnings (2.3) (1.4) 8.1 5.8 Additional Information: 1. The change in PP&E represent cash expenditures for a new factory 2. There were no disposals of PP&E during the year 3. There were no dividends declared during the year 4. The common stock was issued for cash 5. A review of the income statement noted a gross profit margin of 20% and Research & Development costs of $0.7 for the year Required: 1. Prepare a statement of cash flows using the indirect method ANSWER : Net Profit (0.90) WHY IS THE NET PROFIT .90 PLEASE EXPLAIN
Comparable balance sheets are presented below:
Dec. 31, 2015 Dec. 31, 2014
Assets
Cash 1.2 1.9
Inventory 1.3 1.0
Property, Plant & Equipmen 6.0 3.0
Less: Accumulated
8.1 5.8
Liabilities &
Accounts Payable 2.6 2.1
Dividends Payable - -
Bonds Payable 4.4 2.8
Common Stock, $1 Par Value 0.2 0.1
Paid-in Capital in Excess of Par Value 3.2 2.2
8.1 5.8
Additional Information:
1. The change in PP&E represent cash expenditures for a new factory
2. There were no disposals of PP&E during the year
3. There were no dividends declared during the year
4. The common stock was issued for cash
5. A review of the income statement noted a gross profit margin of
20% and Research & Development costs of $0.7 for the year
Required:
1. Prepare a statement of cash flows using the indirect method
ANSWER :
|
Net Profit |
(0.90) |
WHY IS THE NET PROFIT .90 PLEASE EXPLAIN
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