| You are given the following information for Barko Industries: |
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| Barko Industries | ||
| Balance Sheet (Partial) | ||
| Year 3 | Year 4 | |
| Cash | $70,000 | $9,640 |
| AR | 70,000 | 85,000 |
| Inventories | 87,000 | 84,000 |
| Accounts Payable |
48,000 | 51,000 |
| Barko Industries | ||
| Income Statement | ||
| For the Year Ending December 31, Year 4 |
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| Sales | $560,000 | |
| Operating Expenses |
$420,000 | |
| Depreciation Expense |
46,000 | 4,66,000 |
| Income Before Taxes |
$94,000 | |
| Income Tax Expense |
$37,600 | |
| Net Income |
$56,400 | |
| Other Data: |
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| · Barko Industries sold an asset and recorded a loss on the sale of $8.700. The sale price was $220,000 and the asset was originally purchased for $360,000. |
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| · Dividends paid in Year 4 were $22, 460. | ||
| Required: | ||
| 1. Prepare a statement of cash flows for the year ending December 31, Year 4 using the indirect method. |
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| 2. What conclusions could you arrive at regarding the cash position of the firm? |
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| 3. What information was provided in the statement of cash flows that was not evident if just the balance sheet and the income statement were examined? |
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