Preparing a Forecasted Statement of Cash Flows
The following balance sheet and income statement information includes actual data for 2008 and forecasted data for 2009:
|
Actual 2008 |
Forecasted 2009 |
Cash |
$ 100 |
$ 130 |
Accounts receivable |
600 |
780 |
Inventory |
1,300 |
1,690 |
Property, plant, and equipment (net) |
5,000 |
6,300 |
Accounts payable |
500 |
650 |
Long term debt |
4,000 |
5,000 |
Paid in capital |
1,000 |
1,400 |
Retained earnings |
1,500 |
1,850 |
Sales |
$10,000 |
$13,000 |
Cost of goods sold |
6,000 |
7,800 |
Depreciation expense |
1,000 |
1,200 |
Interest expense |
400 |
500 |
Income before income taxes |
$ 2,600 |
$ 3,500 |
Income tax expense |
910 |
1,225 |
Net income |
$ 1,690 |
$ 2,275 |
Prepare a forecasted statement of cash flows for 2009. Use the indirect method of reporting cash flow from operating activities.