Statement of Cash Flow

"Problem 12-5A "The 2008 comparative balance sheet and income statement of Genie Marketing , Inc . Follows . Genie had no noncash investing and financing transactions during 2008 . During the year , there were no sales of land or equipment , no issuance of notes payable , no retirements of stock and no treasury stock transactions "1 "Prepare the 2008 statement of cash flows , formatting operating activities by the indirect method "2 "How will what you learned in this problem help you evaluate an investment "A "B "C "D "E "F "5 "Part 1 "6 "CNA Leasing , Inc . Genie Marketing , Inc "7 "Comparative Balance Sheet "8

"December 31 , 2008 and 2007 "9 "2008 "2007 "Increase (Decrease "10 "Current Assets "11 "Cash and Cash equivalents "8700 "15600 (6900 "12 "Accounts receivalbe "46500 "43100 "3400 "13 "Inventories "94300 "89900 "440 "14 "Interest receivalbe "600 "900 "-300 "15 "Prepaid expenses "1700 "2000 "500 "16 "Plant assets "17 "Land "100900 "93700 "7200 "18 "Total Assets "287800 "255400 "32400 "19 "Current liabilities "20 "Accounts payable "16400 "17900 "-1500 "21 "Interest payable "6300 "6700 "-400 "22 "Salary payable "2100 "1400 "700 "23 "Other accrued liabilities "18100 "18700 "-600 "24 "Income tax payable "6300 "3800 "2500 "25 "Long term liabilities "26 "Notes payable "55000 "6500 "-10000 "27 "Stockholders ' equity "28 "Common stock , no-par "131100 "122300 "8800 "29 "Retained earnings "52500 "19600 "32900 "30 "Total liability and stockholders ' equity "287800 "255400 "32400 "31 "Genie marketing ,Inc "32 "Income statement for 2008 "33 "Revenues "34 "Sales revenue "438000 "35 "Interest Revenue "11700 "36 "Total revenue "449700 "37 "Expenses "38 "Cost of goods sold "205200 "39 "Salary expense "76400 "40 "Deprecation Expense "15300 "41 "Other operating expenses "49700 "42 "Interest expense "24600 "43 "Income tax expense "16900 "44 "Total Expenses "388100 "45 "Net Income "61600 "46 "End of Problem "Problem 12-5A "1 . Prepare the 2008 statement of cash flows , formatting operating activities by the indirect method "Cash Flow Statement "Genie Marketing , Inc "For the year ended 2008 "Cash Flow From Operations "Net Income "61600 "Additions (Sources of cash "Depreciation "15300 "Increase in accounts payable "-1500 "Increase in accrued income taxes "-600 "Subtractions (Uses of cash "Increase in accounts receivable "3400 "Increase in inventory "440 "Net cash flow from operations "78540 "Cash Flows from Investing Activities "Land "7200 "Cash Flows Associated with Financing Activities "Notes payable "-10000 "Net change in cash "154380 "2 . How will what you learned in this problem help you evaluate an investment "By using a cash flow statement of a business in to determine whether or not a person should invest , it is easy to see where the money is being spent and what sources of cash the business has . It is important for a potential investor to see where the money is going within the company and how much they have tied up in inventory . Investing and financing activities that are positive provide an investor with a realistic perspetive of where the organization is headed in the next few years...