Sage Inc., a greeting card company, had the following statements prepared as of
ID: 2535852 • Letter: S
Question
Sage Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
SAGE INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17
12/31/16
$6,100
$6,900
62,500
51,000
34,800
18,100
39,600
60,200
4,900
4,000
154,500
130,100
(34,800
)
(25,300
)
46,300
50,400
$313,900
$295,400
$46,000
$40,200
4,000
6,000
8,100
4,000
8,000
10,000
59,700
69,000
100,000
100,000
30,000
30,000
58,100
36,200
$313,900
$295,400
SAGE INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2017
$339,075
175,000
164,075
119,900
44,175
$11,300
2,000
9,300
34,875
6,975
$27,900
Additional information:
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
SAGE INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17
12/31/16
Cash$6,100
$6,900
Accounts receivable62,500
51,000
Short-term debt investments (available-for-sale)34,800
18,100
Inventory39,600
60,200
Prepaid rent4,900
4,000
Equipment154,500
130,100
Accumulated depreciation—equipment(34,800
)
(25,300
)
Copyrights46,300
50,400
Total assets$313,900
$295,400
Accounts payable$46,000
$40,200
Income taxes payable4,000
6,000
Salaries and wages payable8,100
4,000
Short-term loans payable8,000
10,000
Long-term loans payable59,700
69,000
Common stock, $10 par100,000
100,000
Contributed capital, common stock30,000
30,000
Retained earnings58,100
36,200
Total liabilities & stockholders’ equity$313,900
$295,400
Explanation / Answer
Sage Inc
Statement of cash flows (indirect method)
For the year ended December 31 2017
Cash flows from operating activities Net income 27900 Adjustments to net income Depreciation + Amortization 13600 Gain on sale of equipment (2000) Increase in Accounts receivable (11500) Decrease in inventory 20600 Increase in prepaid rent (900) Increase in accounts payable 5800 Decrease in income tax payable (2000) Increase in Salaries and wages payable 4100 Net cash flows from operating activities 55600 Cash flows from investing activities Sale of equipment (19900-(19900*70%)+2000) 7970 Purchase of equipment (154500-130100+19900) (44300) Purchase of available for sale securities (16700) Net cash flows from investing activities (53030) Cash flows from financing activities Principal payment of short term loan (2000) Principal payment of long term loan (9300) Dividend payments (6000) Net cash used by financing activities (17300) Increase (decrease) in cash (14730)Related Questions
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