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The financial records of John Cooper showed the following information related to B/S accounts and I/S. Balance Sheet at End of Year 2019 2020 Debits $ 2,000 3,800 10,400 600 $ 2,200 4,800 10.000 800- Cash A/R Inventory Prepaid expenses LT - investments Buildings Machinery Patents 2,000 18,000 8,000 0- 24.000 12,400 800 1.000 [ [_ $45.00 $55,000 Credits A/P ST-N/P Accrued wages $ 2,400 1,800 600 $ 1,600 2,600 400 WEB Acc. Depreciation LT-N/P C/S R/E 8,000 6,000 24,000 3,000 $45,800 7,800 7,000 30,000 5,600 $55,000 Income Statement for the Year Revenues and gains CGS Salaries expense Interest expense Other expenses and losses NI $24,400 (8,400) (6,000) (1,600) (3.200) $5,200 Additional data for 2020: Acquired machinery costing $3,000; paid 1/3 in cash and issued a 5-year, Interest bearing note for the balance. II. Acquired machinery costing $5,000 by issuing C/S. III. Made addition to building costing $6,000, paid cash IV. Paid a $1,000 LT-note by issuing C/S. V. Sold investment for $2,400 cash. VI. Paid cash dividends. VII. Depreciation recorded on buildings and machinery, $1,600. VIII. Disposed for $1,400 old machinery that originally cost $3,600 and that was X depreciated. IX. Proceeds from the ST-N/P were used to purchase inventory Additional data for 2020: I. Acquired machinery costing $3,000; paid 1/3 in cash and issued a 5-year, interest-bearing note for the balance II. Acquired machinery costing $5,000 by issuing C/s. III. Made addition to building costing $6,000, paid cash. IV. Paid a $1,000 LT-note by issuing C/S. V. Sold investment for $2,400 cash. VI. Paid cash dividends. VII. Depreciation recorded on buildings and machinery, $1,600.- VIII. Disposed for $1,400 old machinery that originally cost $3,600 and that was depreciated IX Proceeds from the ST-N/P were used to purchase inventory. Required: a. Prepare a statement of cash flows using the INDIRECT method, 20 marks b. Calculate FCF = NOPAT - Change in NOA where ) Cash is included in NOA and (ii) Cash is excluded from NOA 8 marks. It is always helpful to construct the table below: 2019 2020 OL NOA c Calculate DD = net cash payments to shareholders, and CC-net cash payments to debtholders. 6 marks d. Calculate the change in NWC, where NWC (net working capital) = CA-CL 4 marks c. Calculate DD = net cash payments to shareholders, and CC = net cash payments to debtholders. 6 marks d. Calculate the change in NWC, where NWC (net working capital) = CA-CL. 4 marks r 1 Suppose short term N/P is operating, and that the proceeds from the ST-N/P were used to purchase inventory. Calculate the cash paid for purchases, 4 marks

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