Jenna and Matt Wilder are completing their second year operating Mountain High, a downhill ski area and resort. Mountain High reports a net loss of $(10,000) for its second year, which includes an $85,000 unusual loss from fire. This past year also involved major purchases of plant assets for renovation and expansion, yielding a year-end total asset amount of $800,000. Mountain High’s net cash outflow for its second year is $(5,000); a summarized version of its statement of cash flows follows. Net cash flow provided by operating activities . . . . . . . . . . . . . . . $ 295,000 Net cash flow used by investing activities . . . . . . . . . . . . . . . . . . (310,000) Net cash flow provided by financing activities . . . . . . . . . . . . . . . 10,000 Required Write a one-page memorandum to the Wilders evaluating Mountain High’s current performance and assessing its future. Give special emphasis to cash flow data and their interpretation.

Question

Jenna and Matt Wilder are completing their second year operating Mountain High, a downhill
ski area and resort. Mountain High reports a net loss of $(10,000) for its second year, which includes an
$85,000 unusual loss from fire. This past year also involved major purchases of plant assets for renovation
and expansion, yielding a year-end total asset amount of $800,000. Mountain High’s net cash outflow for
its second year is $(5,000); a summarized version of its statement of cash flows follows. Net cash flow provided by operating activities . . . . . . . . . . . . . . . $ 295,000
Net cash flow used by investing activities . . . . . . . . . . . . . . . . . . (310,000)
Net cash flow provided by financing activities . . . . . . . . . . . . . . . 10,000 Required
Write a one-page memorandum to the Wilders evaluating Mountain High’s current performance and assessing
its future. Give special emphasis to cash flow data and their interpretation.

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