The financial statements of Tootsie Roll Industries are presented in Appendix A.

Instructions

Answer the following questions.

(a) What was the amount of net cash provided by operating activities for 2007? For 2006? What were some causes of any significant changes in cash from operations between 2006 and 2007?

(b) What was the amount of increase or decrease in cash and cash equivalents for the year ended December 31, 2007?

(c) Which method of computing net cash provided by operating activities does Tootsie Roll use?

(d) From your analysis of the 2007 statement of cash flows, was the change in accounts receivable a decrease or an increase? Was the change in inventories a decrease or an increase? Was the change in accounts payable a decrease or an increase?

(e) What was the net cash used by investing activities for 2007?

(f) What was the amount of interest paid in 2007? What was the amount of income taxes paid in 2007?