104 PART 1 Introduction to Managerial Finance
TABLE 3.5 Baker Corporation Balance
Sheets ($000)December 31
Assets 2003 2002Current assets
Cash $ 400 $ 300
Marketable securities 600 200
Accounts receivable 400 500Inventories (^6) (^0) (^0) (^9) (^0) (^0)
Total current assets $ (^2) , (^0) (^0) (^0) $ (^1) , (^9) (^0) (^0)
Gross fixed assets (at cost)
Land and buildings $1,200 $1,050
Machinery and equipment 850 800
Furniture and fixtures 300 220
Vehicles 100 80
Other (includes certain leases) (^5) (^0) (^5) (^0)
Total gross fixed assets (at cost) $2,500 $$2,200
Less: Accumulated depreciation (^1) , (^3) (^0) (^0) (^1) , (^2) (^0) (^0)
Net fixed assets $ (^1) , (^2) (^0) (^0) $ (^1) , (^0) (^0) (^0)
Total assets $
3
,
2
0
0
$
2
,
9
0
0
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $ 700 $ 500
Notes payable 600 700
Accruals (^1) (^0) (^0) (^2) (^0) (^0)
Total current liabilities $1,400 $1,400
Long-term debt $ (^6) (^0) (^0) $ (^4) (^0) (^0)
Total liabilities $ (^2) , (^0) (^0) (^0) $ (^1) , (^8) (^0) (^0)
Stockholders’ equity
Preferred stock $ 100 $ 100
Common stock—$1.20 par, 100,000 shares
outstanding in 2003 and 2002 120 120
Paid-in capital in excess of par on common stock 380 380
Retained earnings (^6) (^0) (^0) (^5) (^0) (^0)
Total stockholders’ equity $ (^1) , (^2) (^0) (^0) $ (^1) , (^1) (^0) (^0)
Total liabilities and stockholders’ equity $
3
,
2
0
0
$
2
,
9
0
0
ended December 31, 2003, for Baker Corporation is presented in Table 3.6.
Note that all cash inflows as well as net profits after taxes and depreciation are
treated as positive values. All cash outflows, any losses, and dividends paid are
treated as negative values. The items in each category—operating, investment,
and financing—are totaled, and the three totals are added to get the “Net
increase (decrease) in cash and marketable securities” for the period. As a