Darryl Dotson Applied Managerial Finance Colorado Technical University July 9, 2016

Apex Printing Balance Sheets As of December 31, 2013 and 2012 Cash    Assets  2013 2012 Cash  6,000 5,700 Accounts Receivable  2,350 2,300 Inventory 12,100 6,500 Total  Current Assets  20,450 14,500 The above balance sheet shows the status report of the Apex Printing; showing the progress in terms of year 2013 and 2012. It shows the total assets of the receivable and the inventory of both the two years. From the above information, it is evident that the account receivable is slightly moved higher in 2013 than in 2012. it therefore implies that Apex Printing has good cash flow. The capability of this company has also been measured through the inventory. The company also shows an increase in inventory from 2012 to 2013. The difference in the inventory implies that the demand of the company’s products is high. Customers have liked the products of the company and that is why their turn out is high. Therefore, the total receivable and inventory has shown a higher progress in 2013 as compared to the previous year of 2012. This implies that in future the company can be predicted of attracting more customers.

Accounts Payable 4,600 3,500 Salaries Payable 0 2,100 Interest Payable  1,500 0 Short Term Notes Payable  12,000 0 Taxes Payable  0 5,600 Total Current Liabilities  18,100 11,200 Mortgate Payable  54,950 100,000 Total Long Term Liabilities  54,950 100,000 Accounts payable decreased by $6,900 (18100-11200). It shows that any form of jump in a liability will indicate that Apex Printing Company will have to pay more cash during the period as compared to the debts that was incurred during the duration of the two years (2013 and 2012). Carrying forward the liability payments is a common technique for saving cash as well as keeping the account balance at a high level. The $6,900 needs to be added. The Salary payable increase increased by $1,100 (4,600-3,500). Liability balances moved on the higher side when any form of additional payments was made. It implies that the cash transactions are will be shown in using the indirect technique by a $1,100 addition. Mortgate Payable is also decrease from $100,000 to 54,950 by $44,950. Therefore, if Apex Printing Company uses the indirect method to give its report its cash flows from its daily operations, and that is why it has taken such form of payables.

Retained Earnings and Common Stock Total Stockholders' Equity  84,550 63,300 Total Liabilities and Stockholders' Equity  157,600 174,500 Apex Printing Company is a total shareholder and that is why the company issues common stock to increase its capital so as to become total shareholders' equity, however, this aspect does not affect the retained earnings (Allen, Rosenberg, Keller, Setser, & Roubini, 2002). When dividends are issues d to the shareholder, it directly impacts the company’s retained earnings. The common stock in this case, is at a state of equilibrium, it has retained its earnings of $60,000 while the retained earning has been affected. The retained earning as per the year 2013 was $24,500 while in 2012 was $3,300. The retained earning has represented part of Apex Printing Company’s net income in a certain period that was not issued or paid to its shareholders’ dividends; however, it was retained to invest again in its business. A company is free to retain some of amounts or earnings for its various developments in technology. It can do it by upgrading its software or in some case it can do it to acquire the smaller competing companies.

Total Assets Land 25,000 20,000 Building & Equipment 300,000 300,000 Less: Accumulated Depreciation (187,850) (160,000) Building & Equipment Total Long Term Assets 137,150 160,000 Total Assets 157,600 174,500 The general formula of getting the assets is generated as liabilities + stockholders' equity. In the Apex Printing Company, the total assets are defined as something that a business person owns in his name and which can be converted into cash (Piotrowski, 1992). The assets are usually broken down into functioning categories. Apex Printing Company has shown an increase in the value of land from 2012 to 2013. Land is an appreciating asset and that is why it has to go up every time. In the because of buildings, depreciate and lose value after some times. However, Apex In the Printing Company has shown a fair depreciate as the value of the building has retained its figure. The value of land has gone up by $5,000 (25,000-20,000) while the value of the building retained its figures at $300,000. To get the Total Long term asset, the two asset’s value is added (Land + Building) = (25,000 + 300,000) = 325000 for the year 2013 and (20,000 + 300,000) = 320000 for the year 2012. After that the two values are subtracted from the Accumulated Depreciation which is (325000-187,850) = 137,150 for the 2013 and (320000-160,000) = 160,000 for 2012.

Liabilities and Stockholders' Equity Accounts Payable 4,600 3,500 Salaries Payable 0 2,100 Interest Payable 1,500 0 Short Term Notes Payable 12,000 0 Taxes Payable 0 5,600 Total Current Liabilities 18,100 11,200 Stockholders' equity stands for the equity stake which is normally held on the books by a company's equity investors. It is calculated by either taking the total assets of the firm then subtracted minus the total liabilities of the company. It can also be gotten by taking the share capital then added to the retained earnings then minus the shares coming from the treasure. In this case all the Payable accounts have been added to come up with the Total Current Liability The Total Current Liabilities for 2013 has a total of $18,100, while the Total Current Labilités for 2012 totals to $11,200. The raising of Apex Printing Company stockholder equity does not seem to be a good news to the shareholders. There are a number of shares outstanding in the Apex Printing Company even if the stockholder equity rises as shown from 2012 to 2013. The existing shareholders can be issued with the value of the shares in a situation where their shares were given at a discount.

Balance Sheets as of December 31, 2013 & 2012 Assets  2013 2012 Cash  6,000 5,700 Accounts Receivable  2,350 2,300 Inventory  12,100 6,500 Total  Current Assets  20,450 14,500 Land  25,000 20,000 Building & Equipment  300,000 300,000 Less:  Accumulated Depreciation - Building & Equipment  187,850 160,000 Total Long Term Assets  137,150 160,000 Total Assets  157,600 174,500 A balance sheet is a financial statement that gives detailed reports the assets that are resources being in the possession of by a business, liabilities, as well as stockholders’ equity at a certain period of time (Allen et al., 2002). Apex Printing Company’s balance sheet is categorized into two. Assets, liabilities, and the stockholders’ equity. The Liabilities are those debts as well as rules of a business. The Stockholders’ equity has the common stock, results at time when the company shares and the retained earnings happens to be the net income retained in a corporation. In this case, the balance sheet for Apex Printing Company is given by taking the value of the total assets less the accumulated depreciation. The total assets as discussed earlier was $157,600 in 2013 and $174,500 for 2012. Therefore, the value $174,500 gotten from 2013 will be used to predict the future financial year.

Cash Flows From Financing Activities Cash paid for mortgage 45,050 Cash paid for dividends 5,000 Net Cash Flow from Financing Activities 50,050 (Cash paid for dividends ) Cash flows from financing activities are those items found in the statement of cash flows. This is a statement that carries the total amount of changes a company goes through during its designated reporting time which are caused by the transaction of the business owner. Apex Printing Company has Cash paid for mortgage which is $45,050 and Cash paid for dividends 5,000 respectively. The total Cash flows from financing activities has been gotten by adding the two values ($45,050 + 5,000) = $50,050.

Income Statements For the Periods Ended December 31, 2013 and 2012 2013 2012 Revenue:  450,000 475,000 Less: Cost of Goods Sold  324,300 374,500 Less: Depreciation Expense  27,850 26,000 Gross Margin  7,850 74,500 Selling, General & Administrative Expenses  29,100 32,000 Income Before Interest & Taxes  68,750 42,500 Interest Expense  7,500 6,000 Income Before Taxes  61,250 36,500 Income Taxes  35,000 30,000 Net Income  26,250 6,500 The income statement comprises of revenues which is the money gotten from the sale of a product before the deduction of the expenses alongside with the resulting net income or even the loss encountered over a certain period of time because of the earnings gotten from the company’s activities. In this aspect, the net income is the money gotten after all the revenues, as well as expenses have been worked for (Allen et al., 2002). Therefore, income statement serves a purpose of reflecting a company’s performance in a certain length of time. This is what makes it different from the balance sheet that shows the results in a single time. In Apex Printing Company, all the expenses values have been calculated and later subtracted from the total revenue of the company for both 2012 and 2013. The expenses are, (-324,300 + -27,850 + -29,100 + -7,500 + - 35,000) = $ 423,750. This expenses figure is then subtracted from the total revenues given as (450,100-423,750) = $26250. $26250 is the income statement for the year 2013. For the year 2012, the expenses are (-374,500 + -26,000 + -32,000 + -6,000 + - 30,000) = $ 468,500. This expenses figure is then subtracted from the total revenues given as (475,000-468,500) = $6250. In simple, the resultant income statement for the year 2013 and 2012 is $26,250 and $6250 respectively.

Cash Flows Statement For the Period Ended December 31, 2013 Net Income  26,250 Adjustments to reconcile net income to net cash provided by operating activities  Depreciation Expense  27,850 Increase in accounts receivable  50 Increase in inventory  5,600  Decrease in salaries payable  2,100 Increase in interest payable  1,500 Decrease in taxes payable  5,600 Increase in Short Term notes Payable  12,000 Increase in accounts payable  1,100 Net Cash Flow from Operating Activities  55,350 Cash Flows from Investing Activities:   Cash paid to purchase land  5,000 Net Cash Flow from Investing Activities  5,000 A cash flow statement is a financial report which gives details of the firm’s cash and the manner in which the funds have been used in a specific period of time. Cash flow statement does not comprise of the non-cash items, for example, depreciation (Newman, 2014). Due to this, it puts it in a good position when it comes to finding out the short-term viability of the firm more so on the areas of paying its bills. Due to the fact that management of cash flow is much important in running of a business and also starting business, it is necessary that an entrepreneur have the knowledge of cash flow statement. In Apex Printing Company all the Adjustments to reconcile net income to net cash provided by operating activities, Depreciation 27,850 Expenses Increase in accounts receivable 50Increase in inventory 5,600, Decrease in salaries payable 2,100, Increase in interest payable1,500 Decrease in taxes payable 5,600, Increase in Short Term notes Payable, 12, 000, Increase in accounts payable 1, 100, Net Cash Flow from Operating Activities were all added to get the Cash Flows from Investing Activities: $55,350.

Cash Balance Net Increase in Cash 300 Plus:  TheBalance at December 31, 2012  5,700 Cash Balance at December 31, 2013  6,000 This slide shows the continuation of the calculation of the cash flow statement. at this stage, the total net increase in cash is gotten as well as the balance sheet at Dec of the year 2012 to come up with the cash flow balance of the year 2013. The two figures are added: Net Increase in Cash 300 added to the Balance at December 31, 2012, 5,700. (300+5,700) =$600. Therefore, the cash flow statement for Apex Printing Company becomes $6,000.

References Newman, J. P. (Ed.). (2014). Container nursery production and business management manual. Oakland, CA: University of California. Piotrowski, C. M. (1992). Interior design management: A handbook for owners and managers. New York: Van Nostrand Reinhold. Allen, M., Rosenberg, C., Keller. C., Setser, B., & Roubini, N. (2002). A balance sheet approach to financial crisis. International Monetary Fund.