Amerbran Company A

Case 11-2
MBA 101 Financial Accounting

Submitted to:
Mr. Joselito B. Un, CPA, MBA, REB

Submitted by:
Rio Erik Tan
Mae Ann Gamolo
Maricel del Rosario

COMPANY BACKGROUND
Amerbran Company was a diversified company that sold various consumer products,
including food, tobacco, distilled products, and personal care products and financial
services.
Amerbrans financial statements

The 2001 financial statements reflect the following transactions (dollar amounts
are in thousands):
1 Depreciation and amortization expense was $115,974.
2 Net income included a loss of $66,046 resulting from the write-off of some
obsolete equipment. The equipment had not yet been disposed of.
3 Net income included $59,610 from Amerbrans investment in a subsidiary;
none of this income had been received in cash.
4 The year-end balance in Deferred Income Taxes was $17,548 lower than it
was at the start of the year.
5 New property, plant, and equipment purchases totaled $260,075, all paid for
with cash. Disposals of fixed assets generated $33,162 cash proceeds.
6 Acquisition of another company that was made for cash resulted in additional
depreciable assets of $31,691 and goodwill of $102,030.
7 Cash dividends were paid in the amount of $216,158.
8 The firm declared and issued a 100 percent common stock dividend effective
September 10, 20x1; that is each shareholder received as a dividend a
number of shares equal to his or her holdings prior to the dividend. The newly
issued shares were valued at par in recording this transaction.

9 The firm spent $30,609 to purchase treasury stock on the open market. Some
of the shares so acquired were reissued to certain employees as a bonus.
10The firm increased its short-term debts as indicated on the balance sheet in
Exhibit 1. Long-term borrowings decreased by $34,606.
QUESTION:
Prepare a statement of cash flows for the year 2001. In order for your statement to
show the correct increase in cash (4,960), you will need to add a "miscellaneous
activity" category; this will capture several transactions that were not described because
they are more complicated than those covered in the text.

Calculating the net change, current ratio, and debt ratio between year 2000 2001

Statement of Cash Flows:

Sources and Uses of Cash: