543 CHAPTER 11 Statement of Cash Flows E11-10 The balance sheets for Plasma Scre

Question

543 CHAPTER 11 Statement of Cash Flows E11-10 The balance sheets for Plasma Screens Corporation, along with additional information, Prepare a statement are provided below: of cash flows-indirect method (L011-2, 11-3) PLASMA SCREENS CORPORATION Balance Sheets December 31, 2018 and 2017 2018 2017 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent s 108,90o $ 126,800 97,000 89,000 3,000 82,000 105,000 6,000 Long-term assets: Land Equipment Accumulated depreciation 530,000 720,000 438,000) (288,000) $1,223,900 $1,277,800 530,000 830,000 Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable $ 109,000 $ 94,000 13,800 6,000 6,900 10,000 115,000 750,000 Long-term liabilities: Notes payable 230,000 Stockholders' equity: Common stock Retained earnings 750,000 184,000 $1,223,900 $1,277,800 233,000 Total liabilities and stockholders' equity Additional Information for 2018 1. Net income is $79,000. 2. The company purchases $110,000 in equipment 3. Depreciation expense is $150,000. 4. The company repays $115,000 in notes payable. 5. The company declares and pays a cash dividend of $30,000 Required Prepare the statement of cash flows using the indirect method.

Explanation / Answer

Statment of cash flow :

Statement of cash flow Net income 79000 Adjusment to reconcile net income Depreciation expenses 150000 Decrease account receivable 15000 Increase inventory (16000) Increase prepaid rent (3000) Increase account payable 15000 Increase income tax payable 4000 Decrrease interest payable (6900) Net cash flow from operating activities 237100 Cash flow from investing activities Purchase of equipment (110000) Net cash flow from investing activities (110000) Cash flow from fianacingactivities Dividend paid (30000) Repay notes payable (115000) Net cash flow from financing activities (145000) Net cash flow (17900) Beginning cash 126800 Ending cash 108900

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