FIN – Barko Industries Problem

  

Part One: Statement of Cash Flows AnalysisYou are given the following information for Barko Industries:Barko IndustriesBalance Sheet (Partial)Year 3Year 4Cash$70,000$9,640AR70,00085,000Inventories87,00084,000Accounts Payable48,00051,000Barko IndustriesIncome StatementFor the Year Ending December 31, Year 4Sales$560,000Operating Expenses$420,000Depreciation Expense46,000466,000Income Before Taxes$94,000Income Tax Expense$37,600Net Income$56,400Other Data: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.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.2.What conclusions could you arrive at regarding the cash position of the firm?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?