| Ahmad Finance Inc,Statement of Cash Flows for the year ending December 31 2012 | ||
| Cash Flows from Operating Activities | ||
| Net Income | 24,000 | |
| Adjustments | ||
| Depreciation | 26,000 | |
| Net income before depreciation | 50,000 | |
| Increase in accounts receivable | $ (6,000.00) | |
| Decrease in inventory | 12,000 | |
| Increase in accounts payable | 5,000 | |
| Decrease in accrued liabilities | (5,000) | |
| Net cash provided from operating activities | 6,000 | |
| 56,000 | ||
| Cash Flows from Investing Activities | ||
| Increase in gross plant and equipment | | ($73,000) |
| Net cash used for investing activities | ($17,000) | |
| Cash Flows from Financing Activities | ||
| decrease(repayment) in mortgage payable | (70,000) | |
| Increase in preferred stock | 120,000 | |
| Dividends** | (22,000) | |
| Net cash provided from financing activities | 28,000 | |
| Net increase in cash | $11,000 | |
| Cash, January 1, 2010 | | 89,000 |
| Cash, December 31, 2010 | 100,000 | |
** the amount of dividends is 22,000
Why??
You have to use the retained earning formula to make sure the amount of dividend is correct
R.E = P.R.E + net income - dividends
47,000 = 45,000 + 24,000 - dividends
Dividends = 22,000
SIMPLE RITE
P/S: for more information about this Q,
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