Agriculture Reference
In-Depth Information
Table 9.4
Statement of cash fl ows for Brookstone Feed and Grain company, year ending
December 31, 2009
Cash Flow from Operating Activities
Net Income after Taxes $196,650
+ Depreciation
290,000
− Increase in Accounts Receivable
20,000
− Decrease in Accounts Payable
15,000
− Decrease in Accrued Expenses
15,000
Net Cash from Operating Activities
$436,650
Cash Flow from Investing Activities
Cash Proceeds from Sale of Equipment
$10,000
− Cash Purchase of Equipment
336,650
Net Cash from Investing Activities
$(326,650)
Cash Flow from Financing Activities
+ Increase in Notes Payable
$45,000
− Decrease in Mortgages
75,000
Net Cash from Financing Activities
$(30,000)
Net Change in Cash
$80,000
Beginning Cash Balance
$95,000
Ending Cash Balance
$175,000
Thus, Ted visited his banker and discussed the possibility of a loan. Ted constructed the bal-
ance sheet shown in
Table 9.5
for the visit to his banker.
Ted, after a discussion with his banker, decided he would purchase the $55,000 of equip-
ment in order to be able to replace the worn-out equipment and be in a position to handle
more business. Ted wants to estimate the impact this will have on his fi rm in the short run,
so he wants to develop a pro forma statement of cash fl ows. He believes that the inventory,
accounts receivable, accounts payable, and accrued expense accounts will stay the same.
Table 9.5
Balance sheet for Aggieland landscaping company, year ending December 31, 2011
Assets
Current Assets:
Cash
Accounts Receivable
Inventory
Fixed Assets:
Equipment
Buildings
- Accumulated Depreciation
Net Buildings & Equip.
Land
Liabilities:
Current Liabilities:
Accounts Payable
Accrued Expenses
Current Portion of
Long-Term Debt
Long-Term Liabilities:
Long-Term Debt
$0
14,000
21,000
$5,000
2,000
10,000
$100,000
50,000
80,000
40,000
70,000
80,000
Total liabilities:
$57,000
Owner's equity
$128,000
Total assets
$185,000
Total liabilities and owner's
equity
$185,000
