This information is for Damon Corporation for the year ended December 31, 2010.
|
Cash received from lenders |
$20,000 |
|
Cash received from customers |
60,000 |
|
Cash paid for new equipment |
35,000 |
|
Cash dividends paid |
8,000 |
|
Cash paid to suppliers |
18,000 |
|
Cash balance 1/1/10 |
12,000 |
Instructions
(a) Prepare the 2010 statement of cash flows for Damon Corporation.
(b) Suppose you are one of Damon’s creditors. Referring to the statement of cash flows, evaluate Damon’s ability to repay its creditors.