Step 1: Calculate the “delta” for the following balance sheets:

Year 0 to year 1

Year 1 to year 2

Year 2 to year 3

Year 3 to year 4 (day 1 or sale date)

Determine the proper classification of the operating, investing and financing activities.Note, the ending cash flow must equal (balance) to the cash flow in the balance sheet.

Example Cash Flow Statement

Assignment:

Prepare cash flow statements for years 1 – 4. The cash flow statements must reflect the cash balance in the balance sheets.