Presented below is the 2018 income statement and comparative balance sheet infor
ID: 2391047 • Letter: P
Question
Presented below is the 2018 income statement and comparative balance sheet information for Tiger Enterprises TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2018 ($ in thousands) $10,000 Sales revenue Operating expenses: $4,000 300 400 2,400 Cost of goods sold Depreciation Insurance Administrative and other Total operating expenses Income before income taxes Income tax expense Net income 7,100 2,900 1,160 $ 1,740 Dec. 31,2018 Dec. 31, 2017 Balance Sheet Information ($ in thousands) Assets: Cash Accounts receivable Inventory Prepaid insurance Plant and equipment $ 420 780 730 110 2,700 (960 $3,780 $260 890 660 50 2,100 660 Less: Accumulated depreciation Total assets $ 3,300 Liabilities and Shareholders' Equity: Accounts payable Payables for administrative and other expenses Income taxes payable Note payable (due 12/31/2019) Common stock Retained earnings $ 330 330 230 1,160 1,020 710 $ 420 460 210 900 860 450 Total liabilities and shareholders' equity $3,780 $ 3,300 Required: Prepare Tiger's statement of cash flows, using the indirect method to present cash flows from operating activities. (Hint: You will have to calculate dividend payments). (Enter your answers in thousands. Amounts to be deducted should be indicated with a minusExplanation / Answer
TIGER ENTERPRISES
Statement of Cash Flows
For the year ended December 31, 2018
Cash flows from operating activities;
Net Income
$1,740
Adjustments to reconcile net income to
Net cash provided by operating activities
Add : Depreciation Expenses
300
Add : Decrease in accounts receivable
110
Less : Increase in inventories
(70)
Less : Increase in Prepaid Insurances
(60)
Less : Decrease in Accounts Payables
(90)
Less : Decrease in Payables for other Expenses
(130)
Add : Increase in Income Tax Payables
20
80
Net cash provided by operating activities
1,820
Cash flows from investing activities:
Purchase of Equipments
(600)
Net cash used by investing activities
(600)
Cash flows from financing activities:
Issuance of common stock
160
Proceeds from Note Payable
260
Dividend Paid
(1,480)
Net cash used by financing activities
(1,060)
Net Decrease in cash
160
Add : Cash balance, at the beginning
260
Cash balance, at the end
420
Dividend Paid = Retained earnings at the beginning + Net Income – Retained earnings at the end
= $450 + 1,740 – 710
= $1,480
TIGER ENTERPRISES
Statement of Cash Flows
For the year ended December 31, 2018
Cash flows from operating activities;
Net Income
$1,740
Adjustments to reconcile net income to
Net cash provided by operating activities
Add : Depreciation Expenses
300
Add : Decrease in accounts receivable
110
Less : Increase in inventories
(70)
Less : Increase in Prepaid Insurances
(60)
Less : Decrease in Accounts Payables
(90)
Less : Decrease in Payables for other Expenses
(130)
Add : Increase in Income Tax Payables
20
80
Net cash provided by operating activities
1,820
Cash flows from investing activities:
Purchase of Equipments
(600)
Net cash used by investing activities
(600)
Cash flows from financing activities:
Issuance of common stock
160
Proceeds from Note Payable
260
Dividend Paid
(1,480)
Net cash used by financing activities
(1,060)
Net Decrease in cash
160
Add : Cash balance, at the beginning
260
Cash balance, at the end
420
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