Fundamentals of Financial Management (Concise 6th Edition)

Chapter 3 Financial Statements, Cash Flow, and Taxes 83

Tabl e I C 3 - 3 Statement of Stockholders’ Equity, 2008

COMMON STOCK

Retained

Earnings

Total

Stockholders’

Shares Amount Equity

Balances, 12/31/07 100,000 $460,000 $ 203,768 $663,768

2008 Net Income (160,176)

Cash Dividends (11,000)

Addition (Subtraction)

to Retained Earnings (171,176)

Balances, 12/31/08 100,000 $460,000 $ 32,592 $492,592

Operating Activities

Net income ($160,176)

Depreciation and amortization 116,960

Increase in accounts payable 378,560

Increase in accruals 353,600

Increase in accounts receivable (280,960)

Increase in inventories (572,160)

Net cash provided by operating activities ($164,176)

Long-Term Investing Activities

Additions to property, plant, and equipment ($711,950)

Net cash used in investing activities ($711,950)

Financing Activities

Increase in notes payable $436,808

Increase in long-term debt 400,000

Payment of cash dividends (11,000)

Net cash provided by financing activities $825,808

Summary

Net decrease in cash ($ 50,318)

Cash at beginning of year 57,600

Cash at end of year $ 7,282

Tabl e I C 3 - 4 Statement of Cash Flows, 2008