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Acct 2210 Zeigler - EXERCISE 1-16A SOLUTION – pg 36
a.
Review Page 21 for proper formatting
|Palmetto Company |
|Statement of Cash Flows |
|For the Year Ended December 31, 2013 |
| | | | | |
| |Cash Flows From Operating Activities: | | | |
| | Net Cash Inflow from Operating Activities | |$ 15,600 | |
| | | | | |
| |Cash Flows From Investing Activities: | | | |
| | Net Cash Outflow from Investing Activities | |(23,000) | |
| | | | | |
| |Cash Flows From Financing Activities: | | | |
| | Net Cash Outflow from Financing Activities | |(4,500) | |
| | | | | |
| |Net Decrease in Cash | |(11,900) | |
| |Plus: Beginning Cash Balance | |32,000 | |
| |Ending Cash Balance | |$20,100 | |
| | | | | |
b. NET Cash INFLOW from Operations: Cash inflows from selling fast food to customers was greater than cash outflows for expenses.
Note: Cash flow from operating activities (i.e. day to day operations) is an important (critical!) sub-total on the Statement of Cash Flows.
Why do you think this is?
c. NET Cash OUTFLOW from Investing Activities: The company likely paid cash to purchase long-term assets. Examples include land, buildings, equip, etc.
d. NET Cash OUTFLOW from Financing Activities: The company likely paid cash dividends to shareholders or could have paid back (all, or part of) a bank loan.
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