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Unformatted text preview: 7,000 Cash balance (E) $ 6000 5. $15,000 of shares were issued in exchange for land. 6. Although Atlantic Inc. earned $24,200 net income during 2006, its CFO was $36,700. Non-cash item depreciation is added and changes in non-cash working capital accounts are adjusted to NI to determine CFO. Most specifically, decrease in A/R and increase in Wages/P affect CFO positively; increase in inventory and prepaid insurance and decrease in A/P and tax/P affect CFO negatively. In addition, $10,000 was invested in plant and equipment and $27,700 was paid to reduce debt and as dividends. In conclusion, NI is accrual based so it differed from CFO. Cash was also used for financing and investing activities. Atlantic Inc. invested $25,000 in land and plant and equipment. To finance the investments, in addition to the $36,700 generated from operating activities, Atlantic Inc. raised $12,700 from financing activities and used $1,000 cash it had....
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- Spring '11
- Cash Flow Statement, CFO