Answer:
1) net cash flow from financing activities:
Dividends paid ($2,000,000)
Net cash flow from financing activities ($2,000,000)
No new stocks were issued, nor any new long term debt was taken.
2) total increase in cash from 2013 to 2014 was $50,000,000
there are two ways to calculate this:
ending balance of cash account 2014 - ending balance of cash account 2013 = $100 - $50 = $50 million
cash flow from operating activities = $52 + $50 + $100 - $100 - $50 = $54
cash flow from investing activities = $0
cash flow from financing activities ($2)
net cash increase = $50 million
Explanation:
Southeast Systems Balance Sheets
2013 2014
Cash $50 $100
Accounts receivable 600 700
Inventory 500 550
Net fixed assets 1,000 1,000
Total Assets $2,150 $2,350
Accounts payable $450 $500
Notes payable 300 400
Long-term debt 650 650
Common equity 300 300
Retained earnings 450 500
Total Liabilities & Owner’s Equity $2,150 $2,350
Income Statement 2014
Sales $2,370
Cost of goods sold 2,070
Depreciation 200
EBIT 100
Interest expenses 20
Taxable income 80
Taxes 28
Net income $52
Dividends $2
