The comparative balance sheets of Champ Inc. at the beginning and the end of the

Question

The comparative balance sheets of Champ Inc. at the beginning and the end of the year 2017 are as follows.

CHAMP INC.
BALANCE SHEETS

Dec. 31, 2017

Jan. 1, 2017

Inc./Dec.

Net income of $47,070 was reported, and dividends of $26,400 were paid in 2017. New equipment was purchased and none was sold.

Prepare a statement of cash flows for the year 2017. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

CHAMP INC.
BALANCE SHEETS

Dec. 31, 2017

Jan. 1, 2017

Inc./Dec.

Assets Cash $ 45,330 $ 13,330 $32,000 Inc. Accounts receivable 94,070 90,740 3,330 Inc. Equipment 42,070 24,740 17,330 Inc. Less: Accumulated Depreciation-Equipment 20,070 11,000 9,070 Inc.     Total $161,400 $117,810 Liabilities and Stockholders’ Equity Accounts payable $ 23,070 $ 17,740 5,330 Inc. Common stock 100,330 82,740 17,590 Inc. Retained earnings 38,000 17,330 20,670 Inc.     Total $161,400 $117,810

Explanation / Answer

Prepare statement of cash flow

Cash flow from operating activities Net ncoome 47070 Adjustment to reconcile net income Depreciation expense 9070 Increase account receivable -3330 Increase account payable 5330 Net cash flow from operating activities 58140 Cash flow from investing activities Equipment purchase -17330 Net cash flow from investing activities -17330 Cash flow from financing activities Issue common Stock 17590 Dividend paid -26400 Net cash flow from financing activities -8810 Net cash flow 32000 Beginning cash 13330 ENding cash 45330

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