The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of cash are subtracted). Please answer which of the following is true if Baldwin issues bonds:. a. It is a use of cash, and will be shown in the financing section as a subtraction
b. It is a use of cash, and will be shown in the investing section as a subtraction.
c. It is a source of cash, and will be shown in the investing section as an addition.
d. It is a source of cash and will be shown in the financing section as an addition
Balance Sheet SSETS DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash $35,467 Cash ur end-of-year cash position. Account Receivable: Reflects the lag between delivery Accounts Receivable $14,655 $18,475 nd payment of your products. Inventories: The inventory current value of your inventory across a otal Current Assets $68,597 products. A zero indicates your company stocked out. Unmet demand would, of course $124,760 Plant & Equipment fall to your competitors. Plant & Equipment The current value of your plant. Accum Deprec: Accumulated Depreciation ($49,604 The total accumulated depreciation from your $75,156 plant. Accts Payable: What the company Total Fixed Assets currently owes suppliers for materials and services. Current Debt: The debt the company otal Assets $143,753 s obligated to pay during the next year of operations. It includes emergency loans used to LIABILITIES & owNERS keep your company solvent should you run out EQUITY f cash during the year. Long Term Debt: The company's long term debt is in the fom of Accounts Payable $10,460 bonds, and this represents the total value of $31,579 Current Debt your bonds. Common Stock: The amount Long Term Debt $28,488 capital invested by shareholders in the company. Retained Earnings: The profits that the Total Liabilities $70,527 company chose to keep instead of paying to shareholders as dividends $10,792 Common Stock $62,433 Retained Earnings Total Equity $73,225 Total Liab. & O. Equity $143,753 Cash Flow Statement Cash Flows from operating Activities e Cash Flow Statement examines what happened in the Cash unt during the year. Cash injections appear as positive numbers and Net Income (Loss ash withdrawals as negative numbers. The Cash Flow Statement is an Depreciation Extraordinary gains/losses/writeoffs xcellent tool for diagnosing emergency loans. When negative cash Accounts Payable ows exceed positives, you are forced to seek emergency funding. For xample, if sales are bad and you find yourself carrying an abundance of Inventory xcess inventory, the report would show the increase in inventory as a Accounts Receivable huge negative cash flow. Too much unexpected inventory could outstrip our inflows, exhaust your starting cash and force you to beg for money Net cash from operations Cash Flows from Investing Activities to keep your company afloat. Plant Improvemen Cash Flows from Financing Activities Cash Flow Summary Dividends Paid Baldwin Sales of Common Stock Purchase of Common Stock Cash from long term debt 20.000 Retirement of long term debt 10.000 Change in current debt (net) Net cash from financing activities Net change in cash position 10.000 Closing cash position 20.000 2017 2016 Common Size $25,112 24.7% 10.2% $12,970 $7,143 12.9% $45,225 47.7% $93,960 86.8% 34.5% ($41,287 $52,673 52.3% 00.0% $97,898 $8,038 7.3% $14,206 22.0% 19.8% $20,811 $43,055 49.1% $8,799 7.5% $46,044 43.4% 50.9% $54,843 $97,898 00.0% 2017 2016 $16,389 $14,171 $8,317 $6,264 $0 $2,422 $1,642 ($11,332 $7,067 $1,685 $3,154 $14,112 $25,991 ($30,800) ($9,580) $6,994 $1,993 $0 $0 ($1,596 $18,977 $1,298 ($11,300) $0 $17,373 ($4,138 $27,043 ($11,431 $10,355 $4,980 $35,467 $25,112