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Cash Flow Statement and Indirect Method

Lori Crump owns a small trucking operation. The bookkeeper presented Crump with the following income statements and balance sheets for 2006 and 2005.
Income statements
2006 2005
Revenues $191,400 $182,600
Operating expenses
Depreciation $26,400 $26,400
Fuel $77,000 $46,200
Drivers salaries $44,000 $35,200
Tax and licenses $22,000 $17,600
Repairs $30,800 $19,800
Miscellaneous $2,200 $202,400 $1,100 $146,300
Income (loss) ($11,000) $36,300

Balance sheets
12/31/2006 12/31/2005
Cash $22,000 $4,400
Accounts receivables $8,800 $26,400
Net fixed assets $198,000 $224,400
Total assets $228,800 $255,200
Accounts payable $30,800 $22,000
Accrued salaries $8,800 $5,500
Other accruals $3,300 $1,100
Long term debt $100,100 $129,800
Crump, capital $85,800 $96,800
Total liabilities and capital $228,800 $255,200

Crump does not understand how the company can be $17,600 ahead of last year in terms of cash on hand and yet show an $11,000 loss for the year.

Required: Prepare a cash flow statement (indirect method) to use in explaining this to Lori Crump.

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Solution Summary

This solution prepares a cash flow statement in Excel to explain why the company is $17600 ahead of last year in terms of net cash on hand despite of Net loss during the year. All workings and formulas are shown.

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