challenge problem using the financial statements below 599879

Challenge Problem Using the financial statements below,

Compute common-size financial statements.
Put together a statement of cash flows of the firm. Where did the firm invest funds during the year? How did it finance these purchases?

Income Statements for Global Manufacturing, Inc.

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YEARS ENDED DECEMBER 31	2010	2009
Net revenues or sales	$700,000	$600,000
Cost of goods sold	450,000	375,000
Gross profit	250,000	225,000
Operating expenses:
General and administrative	95,000	95,000
Selling and marketing	56,000	50,000
Depreciation	25,000	20,000
Operating income	74,000	60,000
Interest	14,000	10,000
Income before taxes	60,000	50,000
Income taxes (40%)	24,000	20,000
Net income	$36,000	$30,000
Number of shares outstanding	50,000	50,000
Earnings per share	$0.72	$0.60

Balance Sheets for Global Manufacturing, Inc.

YEARS ENDED DECEMBER 31 ASSETS	2010	2009
Cash and marketable securities	$25,000	$20,000
Accounts receivable	100,000	80,000
Inventories	125,000	100,000
Total current assets	250,000	200,000
Gross plant and equipment	300,000	225,000
Less: accumulated depreciation	–100,000	–75,000
Net plant and equipment	200,000	150,000
Land	50,000	50,000
Total fixed assets	250,000	200,000
Total assets	$500,000	$400,000
LIABILITIES AND EQUITY
Accounts payable	$78,000	$65,000
Notes payable	34,000	10,000
Accrued liabilities	30,000	25,000
Total current liabilities	142,000	100,000
Long-term debt	140,000	100,000
Total liabilities	$282,000	$200,000
Common stock ($1 par, 50,000 shares)	$50,000	$50,000
Paid-in capital	100,000	100,000
Retained earnings	68,000	50,000
Total stockholders” equity	218,000	200,000
Total liabilities and equity	$500,000	$400,000