Exercise 23-12 Condensed financial data of Sage Company for 2017 and 2016 are pr

Question

Exercise 23-12 Condensed financial data of Sage Company for 2017 and 2016 are presented below SAGE COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 2016 $1,820 $1,150 1,7801,310 1,6001,930 1,710 2017 Cash Receivables Inventory Plant assets Accumulated depreciation Long-term investments (held-to-maturity) 1,930 (1,200) (1,160 ) 1,3201,400 $7,250 $6,340 Accounts payable Accrued liabilities Bonds payable Common stock Retained earnings $1,190 $880 270 1,520 1,9001,730 1,940 $7,250 $6,340 190 1,430 2,540 SAGE COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue Cost of goods sold Gross margin Selling and administrative expenses Income from operations Other revenues and gains $6,860 4,620 2,240 920 1,320 Gain on sale of investments Income before tax Income tax expense Net income Cash dividends Income retained in business 80 1,400 540 860 260 $600 Additional information: During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2017. Prepare a statement of cash flows using the direct method. (Show amounts in the investing and financing sections that decrease cash flow with either a -sign e.g 15,000 or in parenthesis e.g. (15,000))

Explanation / Answer

Statement of Cash Flow Particulars Amount Total Amount Cash Receipts from Customers           6,390.00 Cash payment to suplliers         (3,980.00) Cash payments for Operating Expense             (960.00) Income tax expense             (540.00) Cash flow from operating activities                 910.00 Cash flow from Investing activities Sale of investment = (1400 - 1320)+ 80               160.00 Purchase of Plant assets = 1930- 1710 - 70 + 40             (150.00) Sale of PPE Cash flow from Investing activities                   10.00 Cash flow from Financing activities Issue of Stock = 1900 - 1730 - 70               100.00 Repayment of bonds payable               (90.00) Dividends Paid             (260.00) Cash flow from Financing activities               (250.00) net change in cash and cash equivalents                 670.00 Opening cash and cash equivalents             1,150.00 Closing cash and cash equivalents             1,820.00 Sales           6,860.00 Less Increase in Accounts Receivable               470.00 Total Collections from customers           6,390.00 COGS           4,620.00 less Decrease in Inventory             (330.00) Purchases           4,290.00 Purchases           4,290.00 Less Increase in AP               310.00 Total Payments to Suppliers           3,980.00 Selling Expenses               920.00 Less depreciation               (40.00) Decrease in Accrued liabilities                 80.00 Net Payment for Operating Exp               960.00

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