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Cash flow sheet

Please see the attached file for full problem description.

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Prepare statement of cash flows (indirect method) using balance sheet data. Presented
below are comparative balance sheets for Millco, Inc., at January 31 and February
28, 2004.

MILLCO, INC.
Balance Sheets
February 28 and January 31, 2004
February 28 January 31
Assets
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 42,000 $ 37,000
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,000 53,000
Merchandise inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,000 94,000
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $187,000 $184,000
Plant and equipment:
Production equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166,000 152,000
Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . (24,000) (21,000)
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $329,000 $315,000
Liabilities
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 44,000 $ 44,000
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,000 41,000
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,000 24,000
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $102,000 $109,000
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,000 46,000
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $135,000 $155,000
Owners' Equity
Common stock, no par value, 40,000 shares authorized,
30,000 and 28,000 shares issued, respectively . . . . . . . . . . . . $104,000 $ 96,000
Retained earnings:
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 64,000 $ 43,000
Net income for month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,000 29,000
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,000) (8,000)
Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 90,000 $ 64,000
Total owners' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $194,000 $160,000
Total liabilities and owners' equity . . . . . . . . . . . . . . . . . . . . . . . . $329,000 $315,000

Prepare a statement of cash flows that explains the change that occurred in cash during the month. You may assume that the change in each balance sheet amount is due to a single event

Use the space to the right of the January 31 data to enter the difference between the February 28 and January 31 amounts of each balance sheet item; these are the amounts that will be in your solution.

Attachments

Solution Preview

Statement of Cash Flow
indirect method
Net Income 36,000
- Increase in A/R -11,000
+ Decrease in inventory 13,000
...

$2.19