Reference no: EM132696993

Problem - Assume the following income statement and balance sheet information:

Service revenue (all cash) $175

Operating expenses

Salaries (all cash) 85

Net income $90

2020 2019

Current assets

Cash $1,250 $1,600

Short-term invest 100 200

$1,350 $1,800

Liabilities

Borrowings 600 1,000

Stockholders' equity

Common stock 200 300

Retained earnings 550 500

750 800

$1,350 $1,800

Other information: The short-term investments are riskless and will be converted to a known amount of cash in 60 days. Borrowings are non- current. No gain or loss occurred when common stock was repurchased.

Required -

1. Calculate cash flow from operating activities.

2. Prepare the 2020 statement of changes in equity.

3. Calculate cash flow from financing activities.

4. Prepare a cash flow table. Show that cash effects net to a $450 outflow.