Presented below is the 2013 income statement and comparative balance sheet information for

Silicon Valley Incorporation.

Silicon Valley Incorporation
Income Statement
For the year ended December 31, 2013
Name of Accounts
$
Sales Revenue
Cost of Goods Sold
Depreciation
Insurance
Administrative and Other Expenses
Total Operating Expenses
Income before Income Taxes
Income Tax Expense
Net Income

$3360,00
0
240,000
100,000
1800,000
5500,000
1500,000
600,000
900,000

Silicon Valley Incorporation

Balance Sheet
For the year ended December 31, 2013 & 2012
2013
Assets:
Cash
Accounts Receivables
Inventory
Prepaid Insurance
Plant and Equipment
Accumulated Depreciation
Total Assets
Liabilities and Shareholders Equity
Accounts Payable
Administrative & Other Expense Payable
Income Tax Payable
Notes Payable (due on 31/12/2014)
Common Stock
Retained Earnings
Total Liabilities and Shareholders Equity

$
$7000,00
0

2012

$300,000
750,000
640,000
50,000
2100,000
(840,000)
3000,000

$200,000
830,000
600,000
20,000
1800,000
(600,000)
2850,000

300,000
300,000
200,000
800,000
900,000
500,000
3000,000

360,000
400,000
150,000
600,000
800,000
540,000
2850,000

Required: Prepare Silicon Valleys Statement of Cash Flows for the year ended December 31,
2013, using both Direct and Indirect Method

Cash Flows from Operating Activities

Cash Inflows from Operating Activities:
Cash Received from Customers
Total Cash Collection from Operating Activities
Cash outflows through Operating Activities:
Payment to Suppliers
Insurance Paid during the year

Administrative and Other Expense paid during the

year
Income Taxes Paid during the year
Total Cash paid through Operating Activities
Net cash flow from Operating Activities
Cash Flows from Investing Activities:
Addition of Plant & Equipment
Net cash flow from Investing Activities
Cash flow from Financing Activities
Issue of Notes Payable
Issue of Common Stock
Total Cash Inflows from Financing Activities
Cash outflows through Financing Activities:
Dividend Paid
Net cash flow through Financing Activities
Net Changes in Cash during the year
Add: Cash Balance, beginning
Cash balance, Ending

$7,080,000
$7,080,000
$3,460,000
130,000
1,900,000
550,000
$6,040,000
$1,040,000
300,000
-300,000
200,000
100,000
300,000
940,000
-640,000
$100,000
$200,000
$300,000

Cash collection from customers

Sales
Add: Accounts Receivable, beginning

Less: Accounts Receivable, ending

Cash Collected from Customers
Purchase During the year ended 2013
Closing Inventory
Add: Cost of Goods Sold

$7,000,00
0
830,000
$7,830,00
0
750,000
$7,080,00
0

640,000
$3,360,00
0

Less: Beginning Inventory

Purchase during the Year

$4,000,00
0
600,000
$3,400,00
0

Cash Payment to the Suppliers

Purchase during the Year
Add: Accounts Payable, beginning

Less: Accounts Payable, ending

$3,400,00
0
360,000
$3,760,00
0
300,000
$3,460,00
0

Administrative & Other Expenses During the year

Administrative & Other Expenses
1,800,000
Add: Admin & other expense payable, beginning
400,000
2,200,000
Less: Admin & other expense payable, ending
300,000
1,900,000
Income Taxes Paid during 2013
Income Tax Expense
Add: Income Taxes Payable, beginning
Less: Income Taxes Payable, ending

Dividend Paid during 2013

Retained Earnings, beginning
Add: Net Profit during the year
Less: Retained Earnings, ending
Dividend Paid

600,000
150,000
750,000
200,000
550,000

540,000
900,000
1,440,000
500,000
940,000

Insurance Paid during 20123

Insurance Expense
Add: Prepaid Insurance, ending
Less: Prepaid Insurance, beginning

100,000
50,000
150,000
20,000
130,000