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  • Handy Dan

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    Snigdha Kishore
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    Retained earnings increased from $39 to $44 from Year 1 to Year 2 as the company had net income of $5 and paid no dividends. From Year 2 to Year 3, retained earnings further increased from $44 to $50 as net income was $6 with no dividends paid. The company's cash flow from operations was negative in both Year 2 and Year 3 due to increases in accounts receivables and inventory outpacing increases in accounts payable. Cash flow from investing was negative due to capital expenditures on property and equipment exceeding depreciation expense. Cash flow from financing was positive due to increases in short-term and long-term borrowing as well as stock sales, allowing the company to end

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    Retained earnings increased from $39 to $44 from Year 1 to Year 2 as the company had net income of $5 and paid no dividends. From Year 2 to Year 3, retained earnings further increased from $44 to $50 as net income was $6 with no dividends paid. The company's cash flow from operations was negative in both Year 2 and Year 3 due to increases in accounts receivables and inventory outpacing increases in accounts payable. Cash flow from investing was negative due to capital expenditures on property and equipment exceeding depreciation expense. Cash flow from financing was positive due to increases in short-term and long-term borrowing as well as stock sales, allowing the company to end

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    23 views6 pages

    Handy Dan

    Uploaded by

    Snigdha Kishore
    Retained earnings increased from $39 to $44 from Year 1 to Year 2 as the company had net income of $5 and paid no dividends. From Year 2 to Year 3, retained earnings further increased from $44 to $50 as net income was $6 with no dividends paid. The company's cash flow from operations was negative in both Year 2 and Year 3 due to increases in accounts receivables and inventory outpacing increases in accounts payable. Cash flow from investing was negative due to capital expenditures on property and equipment exceeding depreciation expense. Cash flow from financing was positive due to increases in short-term and long-term borrowing as well as stock sales, allowing the company to end

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 6

    Handy Dan Inc,

    Statement of Retained Earnings

    Year 2
    Retained Earnings (Year 1) $39
    Add : Net Income 5
    Less:Dividends 0

    Retained Earnings (Year 2) $ 44


    Year 3
    $ 44
    6
    0

    $50
    Handy Dan,Inc
    Statement of Cash Flow

    Year 2 Year 3
    Operations
    Net Income 5 6
    Depreciation expense 8 11
    Accounts Receivables -11 -15
    Inventory -61 -86
    Accounts Payable 30 31

    Cash flow from operations -29 -53

    Investing Activities
    Purchase of P&E -80 -111

    Cash flow from investing -80 -111

    Financing Activities
    Short-term borrowing 19 23
    Long-term borrowing 82 112
    Stock sales 12 35
    Dividend payments 0 0

    Cash flow from financing 113 170

    Change in cash 4 6
    Beginning Cash 10 14

    Ending Cash 14 20
    Handy Dan,Inc
    Statement of income

    Year 2 Year 3
    Sales 980 1372
    Cost of Goods Sold 727 1017

    Gross profit 253 355


    Depreciation Expense 8 11
    Other operating expenses 217 292

    Operating Income 28 52
    Interest expense 21 43

    Income before taxes 7 9


    Income tax expense 2 3

    Net Income 5 6
    Year 1 Year 2
    Assets
    Cash 10 14
    Accounts Recievables 27 38
    Inventory 153 214

    Total Current Assets 190 266

    Property & Equipment (Cost) 199 279


    Accumulated Depreciation -9 -17
    190 252
    Total Assets 380 528
    Handy Dan,Inc
    Balance Sheets

    Year 3 Year 1 Year 2 Year 3


    Equities
    20 Account payables 74 104 135
    53 Short Term loan payables 10 29 52
    300 Long Term Debt 207 289 401

    373 Total Liabilities 291 422 588

    390 Contributed Capital 50 62 97


    -28 Retained Earnings 39 44 50
    362
    735 Total Shareholder's Equity 89 106 147

    Total liabilities & shareholder equity 380 528 735

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