MBA

Accounting and Financial Reporting

Dr. Haybat M.
Faculty of Business - Alex University
haybat555@yahoo.com.
01229111130

2
 Forth:
Financial Position Statement
(Balance Sheet)
 Financial Position Statement

Identify the Prepare a classified balance sheet .

major classifications (Using the T- account and report
of the balance sheet. formats)
 Financial Position Statement

◆ Reports the assets, liabilities, and owners' equity

at a specific date.
❖ Is a snapshot of the company’s financial position
at a specific moment in time (usually the end of a month,
quarter, or year.)

◆ Lists the assets in one side and

the liabilities, and owners' equity in the other side.
or ( the assets at the top, followed by liabilities and
owners’ equity)

◆ Total Assets must equal total Liabilities and Owners’ Equity

5
 Financial Position Statement

Classification of the Financial Position Statement

➢ Three General Classifications

Assets, Liabilities, and Owners’ Equity (Shareholders’ Equity)
 Financial Position Statement

……….Company
Financial Position Statement
At ………..

❑ Assets ❑ Liabilities

➢ Current Assets
➢ Current Liab.
➢ Non-current Liab.
➢ Non-current Assets
❑ Owners’ Equity

xxx xxx

Total Assets must equal total Liabilities and Owners’ Equity

Assets
Current Assets
 Financial Position Statement

Current Assets (Short Term Assets)

✓ Cash and other assets a company expects to convert into cash, sell, or
consume either in one year or in the operating cycle, whichever is longer.

❖ Current Assets:
➢ Cash and Cash Equivalents
➢ Short-Term Investments

➢
➢
➢
Receivables
Inventories
Prepaid Expenses
?
(1) Cash and Cash Equivalents
 (1) Cash and Cash Equivalents

❑ Cash : Generally any monies available “on demand.”

❑ Cash Equivalents:
are short-term highly liquid investments that will
mature within three months or less.
(2) Short-Term Investments
 (2) Short-Term Investments

Category Type Classification Valuation

Held-to Maturity Bonds Current or Carrying value

(Held-for Collection) (Debt) Noncurrent (Amortized Cost)

Bonds or Shares
Trading Current Fair Value
(Debt or Equity)

Available-for-Sale
Bonds or Shares Current or
(Non-Trading) Fair Value
(Debt or Equity) Noncurrent

➢ Management’s intent determines current or noncurrent classification

 (2) Short-Term Investments

Category Type Classification Valuation

Held-to Maturity Bonds Current or Carrying value

(Held-for Collection) (Debt) Noncurrent (Amortized Cost)

Bonds or Shares
Trading Current Fair Value
(Debt or Equity)

Available-for-Sale
Shares Current or
(Non-Trading) Fair Value
(Equity) Noncurrent
 (2) Short-Term Investments

Category Type Classification(F.P.S.) Valuation

Held-to Maturity Bonds Current or Cost

(Held-for Collection) (Debt) Noncurrent (Amortized Cost)

Bonds or Shares Fair Value

Trading Current
(Debt or Equity)

Available-for-Sale Shares Current or

Fair Value
(Non-Trading) (Equity) Noncurrent
(3) Receivables
 (3) Receivables

➢ Claims held against customers and others for money, goods, or services.
Accounts Receivable – oral promises
Notes Receivable – written promises

➢ Major categories of receivables should be shown in the balance sheet

or the related notes.
 (3) Receivables

Accounts Receivable – (Presentation)

➢ Current Assets:
Cash $ 346
Accounts
Accounts Receivable
receivable 500
Less:
Less Allowance Fordoubtful
allowance for Doubtfulaccounts
Accounts* 25
475

* AFDA
 (3) Receivables

Accounts Receivable – (Presentation)

Current Assets:
Cash $ 346
Accounts Receivable (net*) 475

➢ *Net of AFDA
➢ Disclosure of AFDA in notes
(4) Inventories
 (4) Inventories

➢ Classification
Inventories are:
items held for sale, or
goods to be used in the production of goods to be sold.

➢ Businesses with Inventory:

Merchandiser or Manufacturer
 Inventory
Balance Sheet (in thousands)
Classification
Current Assets
Cash $ 285,000
Merchandiser Marketable securities 530,000
Accounts receivable 149,000
One inventory account Merchandise inventory 777,000
Purchase goods ready for sale Prepaids 33,000
Total current assets 1,774,000
Investments:
Invesment in ABC bonds 321,657
Investment in UC Inc. 253,980
Notes receivable 150,000
Land held for speculation 550,000
Sinking fund 225,000
Pension fund 653,798
 Inventory
Classification Balance Sheet (in thousands)
Current assets
Manufacturer Cash $ 285,000
Marketable securities 530,000
Accounts receivable 149,000
✓ Three accounts: Inventory
Raw materials Raw materials 210,000
Work in process 417,000
Work in process Finished goods 150,000
Total inventory 777,000
Finished goods
Prepaids 33,000
Total current assets 1,774,000
Investments:
Invesment in ABC bonds 321,657

➢ Company discloses:
1) The method of pricing (e.g., FIFO , or Average).
2) Basis of valuation {e.g., lower-of-Cost-or- Net Realizable Value (NRV)}
(5) Prepaid Expenses
 (5) Prepaid Expenses

➢ Payment of cash that is recorded as an asset

because service or benefit will be received in the future.

Cash Payment BEFORE Services are Received

➢ Prepayments often occur in regard to:

Insurance
Rent
Advertising
Non-current Assets
 Non-current Assets (Long Term Assets)

➢ They are the assets which will be used over a long time
(more than one year) and will not be quickly turned into cash:
1) Long-Term Investments.
2) Property, Plant and Equipment /(PPE) / (Fixed assets).
3) Intangible Assets
4) Other Assets.
First: Long-Term Investments
 First: Long-Term Investments

➢ Examples of Long-Term Investments :

1) Securities (Shares and bonds).
2) PPE (Fixed assets).
Long-Term Investments

Long-Term Investments :
Securities (Shares and bonds).
 Long-Term Investments
Balance Sheet (in thousands)
Current assets
1) Securities Cash $ 285,000

Investments:
Invesment in ABC bonds 321,657
Bonds, and Investment in UC Inc. 253,980
Shares.
Land held for speculation 550,000
Sinking fund 225,000
Pension fund 653,798
Cash surrender value 84,321
Investment in Uncon. Sub. 457,836
Total investments 2,546,592
Property, Plant, and Equip.
Building 1,375,778
Land 975,000
Long-Term Investments

Long-Term Investments :
PPE (Fixed assets)
 Long-Term Investments
Balance Sheet (in thousands)
Current assets
Cash $ 285,000
2) Fixed Assets
Investments:
Invesment in ABC bonds
Investment in UC Inc.
Land held for speculation
Land held for speculation 550,000
(investment) Total investments 550,000
Property, Plant, and Equip.
Building 1,375,778
Land 975,000
 Second:
Property, Plant, and Equipment (PPE)
 Second: Property, Plant, and Equipment (Fixed Assets)

Balance Sheet (in thousands)

Current assets
Cash $ 285,000

Total investments 2,696,592

Property, Plant, and Equip.
Building 1,375,778
Assets of a durable nature Land 975,000
used in the regular operations Machinery and equipment 234,958
Furniture 384,650
of the business. Accumulated depreciation (975,000)
Total PP&E 1,995,386
Intangibles
Goodwill 3,000,000
Patents 177,000
Trademarks 40,000
Third: Intangible Assets
 Third: Intangible Assets
Balance Sheet (in thousands)
Current assets
Cash $ 285,000

Accumulated depreciation (975,000)

Total PP&E 2,170,386
Lack physical substance
Intangibles
and are not financial instruments. Goodwill 2,000,000
Patents 177,000
Limited life intangibles Trademark 40,000
amortized. Franchises 125,000
Copyright 55,000
Indefinite-life intangibles tested Total intangibles 2,397,000
for impairment. Other assets
Prepaid pension costs 133,000
Deferred income tax 40,000
Total other 173,000
DO IT!
 Intangible Assets – “Exercise”
➢ Mickey Snyder Corporation’s adjusted trial balance contained the
following asset accounts at December 31, 2013:
Prepaid Rent $12,000; Goodwill $40,000; Accounts Receivable $2,000;
Franchises $47,000; Patents $33,000; Trademarks $10,000, Notes Receivable
$15,000
✓ In Mickey Snyder ’s balance sheet, intangible assets should be reported at
a. $120,000 ➢ Intangibles:
b. $130,000. Goodwill $ 40,000
c. $97,000. Franchises 47,000
d. $73,000 Patents 33,000
Trademarks 10,000
Total $130,000
Forth: Other Assets
 Forth: Other Assets
Balance Sheet (in thousands)
Current assets
Cash $ 285,000

Intangibles
Goodwill 2,000,000
Patents 177,000
This section should include only Trademark 40,000
unusual items sufficiently Franchises 125,000
different from assets Copyright 55,000
in the other categories. Total intangibles 2,397,000
Other assets
Such as:
Deferred income tax 40,000
▪ Long-term prepaid expenses Total other 40,000
▪ Non-current receivables Total Assets #####
Liabilities
First: Current Liabilities
 First: Current Liabilities

Balance Sheet (in thousands)

Current liabilities
Notes payable XXX
Accounts payable XXX
➢ Obligations Accrued compensation XXX
which will be paid during a period
Unearned revenue XXX
less than one year
Advances from custmers
Income tax payable XXX
Current maturities LT debt XXX
Total current liabilities XXX
Long-term liabilities
Long-term debt 979,500
Obligations capital lease 345,800
Deferred income taxes 77,909
Second: Long-Term Liabilities
 Second: Long-Term Liabilities

Balance Sheet (in thousands)

Current liabilities
Notes payable $ 233,450
Accounts payable 131,800
Accrued compensation 43,000
Unearned revenue 17,000
Income tax payable 23,400
Current maturities LT debt 121,000
“Obligations that a company does Total current liabilities 569,650
not reasonably expect to liquidate Long-term liabilities
within the normal operating cycle.” Bonds payable
Bank loan
All covenants and restrictions must
Total long-term liabilities
be disclosed.
DO IT!
 Liabilities – “Exercise”
➢ Included in Ewing Company’s December 31, 2017, trial balance are the
following accounts:
Accounts Payable $240,000; Bonds Payable $400,000 ; Advances from Customers
$41,000; Notes Payable (maturity date December 31, 2021) $375,000;
Wages Payable $27,000; Interest Payable $12,000; Income Taxes Payable $29,000.
✓ In Ewing ’s balance sheet, Short-term liabilities should be reported at
a. $308,000
➢ Short-term liabilities:
b. $320,000
Accounts Payable $240,000
c. $349,000
Advances from Customers $41,000
d. $322,000 Wages Payable $27,000
Interest Payable $12,000
Income Taxes Payable $29,000

Total 349,000
Owners’ Equity
 Owners’ Equity

➢ Companies usually divide equity into the following parts:

(1) Share capital—ordinary (Preference shares)
(2) Share premium—ordinary (Preference shares)
(3) Reserves (legal reserve,….,…..)
(4) Retained Earnings , and
(5) Accumulated other comprehensive income .

➢ From Changes In Equity Statement

(The ending balances of equity items)
Owners’ Equity
Financial Position Statement- Format

➢ Classified Balance Sheet:

T-Account form
Report form
T-Account Form
Financial Position Statement (T-Account Form)
Report Form
 Financial
Position
Statement
–
(Report Form)
Financial Position Statement
(IFRS - Egypt)
Financial Position Statement - (T-Account Form)
 Financial
Position
Statement
( Report Form)

LO 3
EDITA
 Fifth:
The Statement of Cash Flows
 Statement of Cash Flows

Purpose

Importance

Preparation
 The Purpose
of the Statement of Cash Flows
 PURPOSE OF THE STATEMENT OF CASH FLOWS

➢ To provide relevant information about the cash receipts and

cash payments and the net change in cash resulting from the operating,
investing, and financing activities of a company during the period.

The statement provides answers to the following questions:

What is the change in the cash balance?

Where did the cash What was the cash

come from? used for?
 The Importance
of the Statement of Cash Flows
 IMPORTANCE OF CASH FLOWS

Does the business

How did the business have sufficient cash
fund its operations? to pay its debts
as they mature?

Did the business Did the business

make any dividend borrow any funds
payments? or repay any loans?
 Preparation
of the Statement of Cash Flows
 Information
to Prepare the Statement of Cash Flows
 INFORMATION TO PREPARE THE STATEMENT
➢ Information to prepare the statement of cash flows
usually comes from three sources:

(1) Two Comparative Financial Position Statements

(2 Balance Sheets) (The current and previous years)

(2) Income Statement of the current year

(3) Additional Information (Notes)

 Do Not Forget

Income Statement
CLASSIFICATION OF CASH FLOWS
 CLASSIFICATION OF CASH FLOWS

➢ The Statement of Cash Flows includes the following three sections:

Operating Activities

Investing Activities

Financing Activities
 FORMAT OF
THE STATEMENT OF CASH FLOWS
 FORMAT OF THE STATEMENT OF CASH FLOWS

(1)

(2)

(3)

(4)
(5) + Cash at the beginning of the year
Cash at the end of the year
 FORMAT OF THE STATEMENT OF CASH FLOWS

(1)

(2)

(3)

(4)
(5) + Cash at the beginning of the year
Cash at the end of the year
 FORMAT OF THE STATEMENT OF CASH FLOWS

(1)

(2)

(3)

(4)
(5) + Cash at the beginning of the year
Cash at the end of the year
 FORMAT OF THE STATEMENT OF CASH FLOWS

(1)

(2)

(3)

(4)
(5) + Cash at the beginning of the year
Cash at the end of the year
 FORMAT OF THE STATEMENT OF CASH FLOWS

(1)

(2)

(3)

(4)
(5) + Cash at the beginning of the year
Cash at the end of the year
 FORMAT OF THE STATEMENT OF CASH FLOWS

(1)

(2)

(3)

(4)
(5) + Cash at the beginning of the year
➢ Cash at the end of the year
 FORMAT OF THE STATEMENT OF CASH FLOWS

(1)

(2)

(3)

(4)
(5) + Cash at the beginning of the year
➢ Cash at the end of the year

?
 The Statement of Cash Flows

Classification of Cash Flows

1) Operating
Activities
Cash inflows &
outflows from:

1) Income Statement
&
2) Current Assets
3) Current Liabilities
 The Statement of Cash Flows

Classification of Cash Flows

1) Operating
Activities
Cash inflows &
outflows from: 2) Investing
Activities
1) Income Statement
Cash inflows &
&
outflows from:
2) Current Assets
3) Current Liabilities (Non- current
Assets)
 The Statement of Cash Flows

Classification of Cash Flows

1) Operating
Activities
Cash inflows &
outflows from:
2) Investing
1) Income Statement
Activities 3) Financing
& Cash inflows &
Activities
2) Current Assets outflows from:
Cash inflows &
3) Current Liabilities (Non- current
outflows from:
Assets)
1) Long-Term Liabilities
&
2) Equity
 CLASSIFICATION OF CASH FLOWS
Income Statement

Operating Activities Investing Activities Financing Activities

 How to Calculate
the Net Cash from the different Activities?
Net Cash from Operating Activities
 (1) Operating Activities
(APPLICATION OF THE INDIRECT METHOD OF REPORTING)

Net Cash Flows from

Income Operating Activities
 (1) Operating Activities
(APPLICATION OF THE INDIRECT METHOD OF REPORTING)

Net Income

+ Noncash expenses
such as: depreciation 1
& amortization

Non Operating 2
Changes in noncash
+ Losses OR current assets &
- Gains 3 current liabilities

❖ Cash Flows from Operating Activities

 Operating Activities
➢ We calculate net cash from operating activities using indirect method as follows:

Net Income xxx

Adjustments:
1) + Depreciation expense (non-cash) x
+ Amortization expense (non-cash) x Income
Statement
2) +Losses from selling the non current assets (non-operating) x
- Gains from selling the non current assets (non-operating) x

- Increase in current assets (other than cash) x

+ Decrease in current assets (other than cash) x Balance
3) + Increase in current liabilities x Sheet
- Decrease in current liabilities x

➢ Net cash provided (used) from operating activities xxx

 ADJUSTMENTS FOR CHANGES IN
CURRENT ASSETS AND CURRENT LIABILITIES
❑ Use the following table when adjusting
Net Income to Operating Cash Flows:

Change in Account Balance During Year

Increase Decrease
Current Assets Subtract from net income. Add to net income.

Curren tLiabilities Add to net income. Subtract from net income.

➢ Current assets: Negative relation

➢ Current liabilities : Positive relation

Net Cash from Investing Activities
 (2) Investing Activities

➢ They include Non Current Assets (Long-Term Assets Items)

and the cash flows result from:
(1) purchasing and selling (disposing) of investments and long-lived assets using
cash.
(2) lending money and collecting the loans.
So:

➢ Cash inflows:
⚫ From sale of property, plant, and equipment.
⚫ From sale of long term investments ( bonds and shares of other entities).
⚫ From collection of principal on loans to other entities.

➢ Cash outflows:
⚫ To purchase property, plant, and equipment.
⚫ To purchase long term investments (bonds and shares of other entities ).
⚫ To make loans to other entities.
Net Cash from Financing Activities
 (3) Financing Activities

➢ They include Long-Term Liabilities and Equity Items

and the cash flows result from:
(1) obtaining cash from issuing liabilities and repaying the amounts borrowed.
(2) obtaining cash from stockholders and paying them dividends.
So:
➢ Cash inflows:
⚫ From sale (issuance) of shares (equity securities).
⚫ From sale (issuance) of bonds and notes (liabilities).

➢ Cash outflows:
⚫ To pay dividends to stockholders.
⚫ To pay long-term liabilities or
the co. reacquires its share capital (Treasury shares).
 Net cash by Financing Activities

+ Issuance of Ordinary Shares xx

+ Increase in L.T. Loans &/or Bonds payable xx
(-) Dividends paid x
(-) Decrease in L.T. loans &/or bonds payable x
(-) Purchase of treasury shares x

Net cash provided (used) by financing activities xxx

 NONCASH
INVESTING AND FINANCING ACTIVITIES
 NONCASH INVESTING AND FINANCING ACTIVITIES

➢ Significant financing and investing activities that do not affect cash

are reported in either a separate schedule at the bottom of the statement
of cash flows or in the notes.
❑ Examples include:

1) Issuance of ordinary shares (common stocks) to purchase assets.

2) Issuance of bonds (or notes) to purchase assets.

3) Conversion of bonds into ordinary shares .

4) Exchanges on long-lived assets.

 Preparation of the Statement of Cash Flows

The steps are:

➢ Determine:
1. Cash provided by (or used in) operating activities.
2. Cash provided by (or used in) investing activities.
3. Cash provided by (or used in) financing activities.
4. The change (increase or decrease) in cash during the period.
(The total of 1+2+3)
5. Adding the beginning balance of cash to the change in cash
to get the ending balance of cash.
Examples
 Example (1)

Midwest Beverage Company reported the following items .

➢ Required:
Determine which of the following is operating , investing or financing activity.

Activity
Operating
Financing
Operating
Operating
Investing
Operating
(Long-Term) Financing
 Example (2)

➢ Gordman Corporation reports the following for 2020:

Cash provided by operating activities $200,000
Cash used by investing activities 110,000
Cash provided by financing activities 140,000
Beginning cash balance 70,000
▪ What is Gordman’s ending cash balance?
a. $230,000.
b. $300,000.
c. $450,000.
d. $520,000.
Solution
 Example (3)
❖ Ames Company reported 2010 net income of $151,000.

During 2010, the depreciation expense was $39,000,

accounts payable increased by $9,500 and
accounts receivable increased by $13,000.

➢ The net cash provided (used) by operating activities is:

a. ($186,500) used
b. $186,500 provided
c. $222,500 provided
d. $108,500 provided
Solution

❑ Cash flows from operating activities:

Net income.............................................. $151,000

Adjustments :
+ Depreciation expense ................................... $39,000
+ Increase in accounts payable ...................... 9,500
Increase in accounts receivable .................. (13,000)

➢ Net cash provided by operating activities ..... $186,500

 Example (4)

❖ Martinez Corporation engaged in the following cash transactions

during 2010.
Sale of land and building $181,000
Purchase of treasury shares 40,000
Purchase of land 37,000
Payment of cash dividend 85,000
Purchase of equipment 53,000
Issuance of ordinary shares 147,000
Payment of bonds payable 100,000
➢ Compute the net cash provided (used) by investing activities.

107
 Solution

Sale of land and building...................... $181,000

Purchase of land .................................... (37,000)
Purchase of equipment.......................... (53,000)
➢ Net cash provided by investing activities $ 91,000
 Example (5)
❖ Martinez Corporation engaged in the following cash transactions
during 2010.
Sale of land and building $181,000
Purchase of treasury shares 40,000
Purchase of land 37,000
Payment of cash dividend 85,000
Purchase of equipment 53,000
Issuance of ordinary shares 147,000
Payment of bonds payable 100,000
➢ Compute the net cash provided (used) by financing activities.

109
 Solution

Issuance of ordinary shares .............................. $147,000

Purchase of treasury shares ............................... (40,000)
Payment of cash dividend.................................. (85,000)
Payment of bonds payable................................. (100,000)
➢ Net cash used by financing activities ............. $ (78,000)
 Example (6)

The following are the changes of comparative balance sheets of Orozco Co. :

Assets Change
Cash $ 51,000
Accounts receivable 16,000 ➢ Additional information:
Inventories (9,000) 1) Cash at the beginning of the year
Land (39,000) was $22,000.
Equipment 70,000 2) Net income was $95,000.
Less: Accumulated depreciation 27,000 3) Land was sold and selling price
Liabilities and Shareholders’Equity was 29,000 at a loss of $10,000.
Accounts payable $ (13,000) 4) No equipment was sold.
Bonds payable (25,000) 5) Cash dividends paid were $40,000.
Common shares (1 par) 45,000
Retained earnings 55,000

➢Instructions :
Prepare a statement of cash flows for 2016 for Orozco Co.
 Solution (con.)

Orozco Corporation
Statement of Cash Flows
For the Year Ended December 31, 2016

❑ Cash flows from operating activities:

 Solution (con.)

Orozco Corporation
Statement of Cash Flows
For the Year Ended December 31, 2016

❑ Cash flows from operating activities:

Net income $95,000
Adjustments :
 Solution (con.)

Orozco Corporation
Statement of Cash Flows
For the Year Ended December 31, 2016

❑ Cash flows from operating activities:

Net income $95,000
Adjustments :
+ Depreciation expense $27,000
+ Loss on sale of land 10,000
- Increase in accounts receivable 16,000
+ Decrease in inventory 9,000
- Decrease in accounts payable 13,000

Net cash provided by operating activities 112,000

 Solution (con.)

Net cash provided by operating activities 112,000

❑ Cash flows from investing activities:
 Solution (con.)

Net cash provided by operating activities 112,000

❑ Cash flows from investing activities:
+ Selling price of land 29,000
[Selling price = The change $39,000 – $10,000 loss or + gain]

- Purchase of equipment 70,000

Net cash used by investing activities (41,000)
 Solution (con.)

Net cash provided by operating activities 112,000

❑ Cash flows from investing activities:
+ Selling price of land 29,000

- Purchase of equipment 70,000

Net cash used by investing activities (41,000)

❑ Cash flows from financing activities:

 Solution (con.)

Net cash provided by operating activities 112,000

❑ Cash flows from investing activities:
+ Selling price of land 29,000

- Purchase of equipment 70,000

Net cash used by investing activities (41,000)

❑ Cash flows from financing activities:

- Paying bonds payable 25,000
+ Issuance new shares 45,000
- Payment of cash dividends 40,000
Net cash used by financing activities (20,000)
 Solution (con.)

Net cash provided by operating activities 112,000

❑ Cash flows from investing activities:
+ Selling price of land 29,000

- Purchase of equipment 70,000

Net cash used by investing activities (41,000)

❑ Cash flows from financing activities:

- Paying bonds payable 25,000
+ Issuance new shares 45,000
- Payment of cash dividends 40,000
Net cash used by financing activities (20,000)
Net increase in cash 51,000
 Solution (con.)

Net cash provided by operating activities 112,000

❑ Cash flows from investing activities:
+ Selling price of land 29,000

- Purchase of equipment 70,000

Net cash used by investing activities (41,000)

❑ Cash flows from financing activities:

- Paying bonds payable 25,000
+ Issuance new shares 45,000
- Payment of cash dividends 40,000
Net cash used by financing activities (20,000)
Net increase in cash 51,000
+ Cash at the beginning of the year 22,000
 Solution (con.)

Net cash provided by operating activities 112,000

Cash flows from investing activities:
+ Selling price of land 29,000
[Selling price = The change $39,000 – $10,000 loss or + gain]

- Purchase of equipment 70,000

Net cash used by investing activities (41,000)

Cash flows from financing activities:

- Paying bonds payable 25,000
+ Issuance new shares 45,000
- Payment of cash dividends 40,000
Net cash used by financing activities (20,000)
Net increase in cash 51,000
+ Cash at the beginning of the year 22,000
Cash at the end of the year $ 73,000
✓ End of the Preparation of the Financial Statements