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# Calculating cash flow: XYZ Company

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The balance sheet and income statement for XYZ Company are presented along with some additional information about the accounts.

Answer the following questions concerning cash flows for the period.

a All accounts receivable and accounts payable are related to trade merchandise. Accounts payable are recorded net and always are paid to take all the discounts allowed. The allowance for doubtful accounts at the end of 2008 was the same as at the end of 2007; no receivables were charged against the allowance during 2008.

b The proceeds from the note payable were used to finance a new store building. Capital stock was sold to provide additional working capital.

Required
1. Calculate cash collected during 2008 from accounts receivable
2. Calculate cash payments during 2008 on accounts payable to suppliers
3. Calculate cash provided from operations for 2008
4. Calculate cash inflows during 2008 from financing activities
5. Calculate cash outflows from investing activities during 2008

** Detailed excel file is attached - has more details! **

#### Solution Preview

1 Calculate cash collected during 2008 from accounts receivable

Net credit sales, 2008 6,400,000
Less: Accounts receivable, 2008 (840,000)
Cash collected from accounts receivable 6,140,000

2 Calculate cash payments during 2008 on accounts payable to suppliers

Purchases 5,240,000

#### Solution Summary

The cash flows for XYZ company are calculated.

\$2.19

## Expected value of cash flow and revenue

I. The Widget Company has estimated the following revenue possibilities for the year:

Sales Probability
100 0.15
150 0.20
220 0.30
290 0.20
310 0.15

Determine the expected value

II. The XYZ Company has estimated expected cash flows for 1996 to be as follows:

Probability Cash flow
.10 \$120,000
.15 140,000
.50 150,000
.15 180,000
.10 210,000

Calculate the expected value

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