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Statement of Cash Flows

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Statement of Cash Flow. See attached file for full problem description.

The Four Star Café
Condensed Balance Sheets
December 31, 2001 and 2002
2001 2002
Cash $15,000 $70,000
Marketable Securities $5,000 10000
Accounts receivable 14000 10000
Inventory 20000 24000
Investment 10000 15000
Equipment 320000 415000
Accumulated depreciation -50000 -60000
Total Assets 334000 484000

Current Liabilities
Accounts payable 15000 17000
Dividends payable 23000 22000
mortgage payable(current) 20000 20000
Noncurrent Liabilities
mortgage payable(current) 160000 200000
Common stock 100000 110000
Retained earings 16000 115000
Total liabilities and Owner's Equity 334000 484000

Additional information
1. Investments costing $15000 were sold for $20000.
2. Dividends declared during 2002 totaled $40000.
3. The Café's van, which cost $20000, was sold at a loss of $5000. Its net book value on the date of sale was $10000.
4. Marketable securities that cost $10000 were sold for $5000.
5. Assume current liabilityes are paid on a timely basis.

Prepare the SCF for 2002.

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The Four Star Café
Condensed Balance Sheets
December 31, 2001 and 2002
2001 2002
Cash $15,000 $70,000
Marketable Securities $5,000 10000
Accounts receivable 14000 10000
Inventory 20000 24000
Investment 10000 15000
Equipment 320000 415000
Accumulated depreciation -50000 -60000
Total Assets 334000 484000

Current Liabilities
Accounts payable 15000 17000
Dividends payable 23000 22000
mortgage payable(current) 20000 20000
Noncurrent Liabilities
mortgage payable(current) 160000 200000
Common stock 100000 110000
Retained earings 16000 115000
Total liabilities ...

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The solution explains how to prepare a statement of cash flows for Four Star Café

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As contained in the Week Four electronic reserve readings article readings, this article, Broome, O. W. (2004, March/April). Statement of cash flows: Time for change! Financial Analysts Journal, 60(2), 16. , describes the current SFAS No. 95 requirements for the statement of cash flows, cites recent cases of abuse and disinformation involving the statement, and makes significant recommendations for improving the statement. Based on the comments in the article do you think the three sections of the statement of cash flows provide enough information for the reader? Of the three which provides the most information or is this an 'it depends' answer?

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