Western International University – ACC 302 Statement Of Cash Flows Project

Use the comparative balance sheet and the comparative income statement on the following page to complete this assignment.

Prepare the following documents:

o Schedules showing the amount and percentage change from 2008 to 2009 for the comparative income statements and the balance sheets

o Common-size income statements and balance sheets for 2008 and 2009

o A 2009 Statement of Cash Flows using the indirect method (Financials needed are the comparative balance sheet and the comparative income statement on page two of this document. No additional information is needed.)

Write a 200–300 word memo that presents your analysis of the documents prepared.

Your analysis should include:

o The favorable and unfavorable changes in the components and composition of the statements prepared o The significant changes from Operating Activities, Investing Activities, and Financing Activities

Cash $ 40,000 $ 24,000 Accounts receivable (net) 48,000 41,500 Inventory 43,000 34,500 Prepaid expenses 19,000 15,000 Total Current Assets $ 150,000 $ 115,000 Plant and equipment $ 67,000 $ 61,000 Less accumulated depreciation (41,000) (23,000) Plant and equipment (net) $ 26,000 $ 38,000 Long-term investments 90,000 89,000 Total Assets $ 266,000 $ 242,000 Accounts payable $ 13,000 $ 11,000 Accrued liabilities 55,000 71,000 Total Current Liabilities $ 68,000 $ 82,000 Long-term debt 25,000 8,000 Deferred taxes 4,000 3,500 Total Liabilities $ 97,000 $ 93,500 Common stock ($1 par) and additional paid-in capital 112,000 97,000 Retained earnings 57,000 51,500 Total Liabilities and Equity $ 266,000 $ 242,000 2009 2008 Sales $ 155,000 $ 125,000 Cost of goods sold 83,000 62,500 Gross profit $ 72,000.00 $ 62,500 Selling and administrative 45,700 37,500 Depreciation 18,000 16,800 Operating Profit $ 8,300 $ 8,200 Interest expense 2,000 1,327 Earnings before tax $ 6,300 $ 6,873 Tax expense 800 873 Net Income $ 5,500 $ 6,000