Reference no: EM133133375
Question - KKL Financial is doing really well. Management is considering an acquisition, however this would require additional bank financing. Tom, the CFO has a great relationship with their bank, and knows that his bank manager will require a statement of cash flows before they can begin to discuss any additional financing.
Tom pulls out the recent balance sheet and gathers up the other necessary information.
KKL Financial Inc. Balance Sheet
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December 31, 2021
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December 31, 2020
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Cash
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120,000
|
105,000
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Accounts Receivable
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570,000
|
558,000
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Inventory
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510,000
|
486,000
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Prepaid Expenses
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32,000
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64,000
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Total Current Assets
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1,232,000
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1,213,000
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Investments
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100,000
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109,000
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Plant & Equipment
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2,200,000
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1,800,000
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Less: Accumulated depreciation
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997,000
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767,000
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|
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TOTAL Assets
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2,535,000
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2,355,000
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|
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Accounts Payable
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269,000
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237,000
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Notes Payable
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500,000
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500,000
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Accrued Expenses
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37,000
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58,000
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Current Liabilities
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806,000
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795,000
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|
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Bonds Payable
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150,000
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100,000
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TOTAL Liabilities
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956,000
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895,000
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|
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Preferred Stock
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100,000
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100,000
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Common Stock
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500,000
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500,000
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Retained Earnings
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979,000
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860,000
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TOTAL Shareholder's Equity
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1,579,000
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1,460,000
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|
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TOTAL Liabilities and Shareholder's Equity
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$2,535,000
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$2,355,000
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Additional Information:
Net income for 2021 was $309,000
Cash dividends of $150,000 were declared and paid to common shareholders
Preferred dividends of $40,000 were paid
The company sold $9,000 in long term investments
The company issued $50,000 in long term bonds
Required - Make a statement of cash flows for 2021.