Good morning, can you please help me on completing a cash flow statement using the direct and indirect method and completing the responses for letters A thru C please.
The SCQ Corporation manufactures specialty medical tools ranging from $10,000 to$15,000 per unit. The tools are used in hospitals, clinics, and the home hospitality market.
Sales and balance sheet information for the years 2009-2010 are below:
Balance Sheet
SCQ Corporation
For period ending 12/31/2010
Assets 2010 2009 Liabilities 2010 2009
Cash 150 100
Account receivable 600 400 Accounts payable 400 300
Inventory 750 500 Accrued taxes payable 200 100
Current assets 1,500 1,000 Current liabilities 600 400
Land 50 50
Equipment 1,300 1,200 Note payable 330 300
Less: Acc. depreciation 700 600 Deferred taxes 35 20
Net fixed assets 600 600 Equity:
Total fixed assets 650 650 Common stock 640 500
Paid-in capital 80 80
Retain earnings 465 350
Total equity 1,185 930
Total assets 2,150 1,650 Total equity and liabilities 2,150 1,650
Income Statement
SCQ Corporation
For period ending 12/31/ 2010
Items 2010 2009
Revenue 1,000 900
Cost of goods sold 400 350
Gross profit 600 550
Wages expense 110 100
Interest expense 50 40
Depreciation expense 100 90
Insurance expense 50 50
Other misc. expenses 90 80
Total expenses 400 360
Operating income 200 190
Taxes:
Deferred taxes 15 20
Taxes expense 70 67
Net income after taxes 115 103
Additions to retains earnings 115 103
The information below can be used to complete the direct method of cash flow:
Cash flows from operating activities 2010
Cash receipts
Received from sales of goods 930
Paid for inventory 400
Paid for employees 110
Paid for interest 50
Paid for taxes 70
Paid for other expenses 320
Cash paid for equipment 100
Cash received for common stock 120
Cash received from note payable 30
Assignment Letters A thru C:
A. Indirect method cash flow/cash flow statement:
a. What is the operational cash flow?
b. What is the investing cash flow?
c. What is the financing cash flow?
B. Direct method cash flow:
a. What is the operational cash flow?
b. What is the investing cash flow?
c. What is the financing cash flow?
C. What are the differences in the cash flow concepts and procedures between the direct and indirect methods?