Posted in Southwestern Rentals, Inc., rents equipment to customers ranging from homeowners to large construction companies. The financial information shown below was gathered from its accounting records for 2003. Assume any increase or decrease in the balances from 1/1/03 to 12/31/03 resulted from either receiving or paying cash in the transaction. For example, during 2003 the balance on loans for land holdings increased $150,000 because the company received$150,000 in cash by taking out an additional loan on the land.
|
Balance as of |
Balance as of |
|
|
Items |
1/1/2003 |
12/31/2003 |
|
Cash |
$20,000 |
$0,050,000 |
|
Cash receipts from customers |
600,000 |
|
|
Loans on land holdings |
100,000 |
250,000 |
|
Cash distributions to owners |
150,000 |
|
|
Loan on building |
100,000 |
70,000 |
|
Investments in securities |
850,000 |
1,050,000 |
|
Cash payments for other expenses |
50,000 |
|
|
Cash payments for taxes. |
55,000 |
|
|
Cash payments for operating expenses |
135,000 |
|
|
Cash payments for wages and salaries |
100,000 |
|
1.Prepare a statement of cash flows for Southwestern Rentals, Inc., for the year ended December 31, 2003.
2. Interpretive Question: Does Southwestern Rentals, Inc., appear to be in good shape from a cash flow standpoint? What other information would help you analyze the situation?
