The balance sheet for Plasma Screens Corporation, along with additional informat
ID: 2527804 • Letter: T
Question
The balance sheet for Plasma Screens Corporation, along with additional information, are provided below:
The balance sheet for Plasma Screens Corporation, along with additional information, are provided above.
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Additional Information for 2018:
1. Net income is $67,000.
2. The company purchases $108,000 in equipment.
3. Depreciation expense is $160,000.
4. The company repays $112,500 in notes payable.
5 .The company declares and pays a cash dividend of $24,000.
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Required:
Prepare the statement of cash flows using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)
The balance sheet for Plasma Screens Corporation, along with additional information, are provided below:
PLASMA SCREENS CORPORATIONBalance Sheets
December 31, 2018 and 2017 2018 2017 Assets: Current assets: Cash $ 141,050 $ 151,500 Accounts receivable 77,200 91,000 Inventory 93,000 78,200 Prepaid rent 3,600 1,800 Long-term assets: Land 470,000 470,000 Equipment 768,000 660,000 Accumulated depreciation (424,000) (264,000) Total assets $ 1,128,850 $ 1,188,500 Liabilities and Stockholders' Equity: Current liabilities: Accounts payable $ 97,000 $ 83,200 Interest payable 6,750 13,500 Income tax payable 7,600 4,800 Long-term liabilities: Notes payable 112,500 225,000 Stockholders' equity: Common stock 690,000 690,000 Retained earnings 215,000 172,000 Total liabilities and stockholders' equity $ 1,128,850 $ 1,188,500
Explanation / Answer
Statement of Cash Flows For the Year Ended December 31, 2018 Cash Flows from Operating Activities: Net income 67000 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation expense 160000 Decrease in accounts receivable 13800 Increase in inventory -14800 Increase in prepaid rent -1800 Increase in accounts payable 13800 Decrease in interest payable -6750 Increase in income tax payable 2800 Net cash flows from operating activities 234050 Cash Flows from Investing Activities: Purchase of equipment -108000 Net cash flows from investing activities -108000 Cash Flows from Financing Activities: Payment of notes payable -112500 Payment of cash dividends -24000 Net cash flows from financing activities -136500 Net increase (decrease) in cash -10450 Cash at the beginning of the period 151500 Cash at the end of the period 141050
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