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38 Part 2 Financial Analysis and Planning
In Table 2–9 , the financing activities of the Kramer Corporation are shown using
data from Tables 2–1 , 2–2 , and 2–6 .
Increase in investments (long-term securities) (Table 2–6) . . . . . . . . . . . . . . ($ 30,000)
Increase in plant and equipment (Table 2–6) . . . . . . . . . . . . . . . . . . . . . . . . (100,000)
Net cash flows from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . ($130,000)
Table 2–8
Cash flows from
investing activities
Increase in bonds payable (Table 2–6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000
Preferred stock dividends paid (Table 2–1) . . . . . . . . . . . . . . . . . . . . . . . . . (10,500)
Common stock dividends paid (Table 2–2) . . . . . . . . . . . . . . . . . . . . . . . . . (50,000)
Net cash flows from financing activities . . . . . . . . . . . . . . . . . . . . . . . . ($10,500)
Table 2–9
Cash flows from
financing activities
Table 2–10
KRAMER CORPORATION
Statement of Cash Flows
For the Year Ended December 31, 2009
Cash flows from operating activities:
Net income (earnings after taxes) . . . . . . . . . . . . . . . . . . . . . . $ 110,500
Adjustments to determine cash flow from operating activities:
Add back depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000
Increase in accounts receivable (30,000)
Increase in inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,000)
Decrease in prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . 10,000
Increase in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 35,000
Decrease in accrued expenses . . . . . . . . . . . . . . . . . . . . . . (5,000)
Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
Net cash flows from operating activities . . . . . . . . . . . . . . $ 150,500
Cash flows from investing activities:...