Statement of Cash Flows ( Practice Q.

TSI Manufacturing Co.

Balance Sheet
Dec 31

2005 2004
Assets
Cash $ 88,000 58,000
Accounts Receivable 136,000 76,000
Inventory 128,000 108,000
Prepaid Expenses 8,000 0
Fixed Assets, net of acc. Depr. 720,000 440,000
_________ ________
Total Assets $ 1,080,000 682,000
======== ========

Liabilities & Stockholders’Equity

Accounts payable $ 60,000 38,000
Taxes payable 6,000 8,000
Long-term debt 250,000 52,000
Capital stock 354,000 254,000
Retained earnings 410,000 330,000
________ _________
Total liabilities & stockholders’ equity 1,080,000 682,000
======= =======

TSI Manufacturing Co.

Income Statement
For the year ended Dec 31, 2005

Sales $ 916,000
Cost of Goods Sold ( 376,000)
Gross profit 540,000
Operating expenses :
Selling & administrative 212,000
Depreciation 40,000
Income Taxes 122,000
Interest 56,000 430,000
Net Income 110,000
======
Additional information :
1. Dividends declared & paid for 2005 was $ 30,000
2. TSI purchased new machinery in the amt of $ 320,000
3. TSI issued $ 100,000 in new stock for cash
4. TSI borrowed $ 198,000 in the form of long-term debt.
Required :

A. Calculate the cash flow from operations for 2005 using the indirect method.

Net Income : $

Adjustments :

Cash flow from operations $

============
B. Calculate the cash flow from investing activities for 2005 :

C. Calculate the cash flow from financing activities for 2005 :

D. Using your answers in A, B & C, show a reconciliation of the change in the cash balance for 2005.