Exercise 23-11 Condensed financial data of Tamarisk Company for 2017 and 2016 ar

Question

Exercise 23-11

Condensed financial data of Tamarisk Company for 2017 and 2016 are presented below.

TAMARISK COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016

2017

2016

$1,780

$1,130

1,740

1,290

1,610

1,870

1,930

1,710

(1,210

(1,150

1,290

1,440

$7,140

$6,290

$1,180

$900

190

240

1,410

1,590

1,920

1,690

2,440

1,870

$7,140

$6,290

TAMARISK COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2017

$6,880

4,650

2,230

940

1,290

80

1,370

540

260

$570

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 indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

TAMARISK COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016

2017

2016

Cash

$1,780

$1,130

Receivables

1,740

1,290

Inventory

1,610

1,870

Plant assets

1,930

1,710

Accumulated depreciation

(1,210

)

(1,150

) Long-term investments (held-to-maturity)

1,290

1,440

$7,140

$6,290

Accounts payable

$1,180

$900

Accrued liabilities

190

240

Bonds payable

1,410

1,590

Common stock

1,920

1,690

Retained earnings

2,440

1,870

$7,140

$6,290

TAMARISK COMPANY Statément of Cash Flows (Indirect Method) Adjustments to reconile net inceme to

Explanation / Answer

STATEMENT OF CASH FLOW Amount in $ Amount in $ Net income $                   830 Cash flows from operating activities Adjustments for: Depreciation of the year $                      60 $                      60 Effects/ changes in Assets & Liabilities (Increase) / Decrease in Account receivables $                  -450 Inventory Decrease / (Increase) $                   260 Accounts payable Increase / ( Decrese) $                   280 Accrued Liabilities $                    -50 $                      40 Net cash from operating activities $                   930 Cash flows from investing activities Purchase of Plant Assets ($ 1710 - $ 1930 + $ 70) $                  -150 Sale of Long term investment $                   150 Net cash used in investing activities $                       -   Cash flows from Financing activities Repayment of Bonds $                  -180 Dividend Paid $                  -260 Issue of common Stock ($ 1920 - $ 1690 -$ 70) $                   160 Net cash used in financing activities $                  -280 Net increase in cash and cash equivalents $                   650 Add :Cash and cash equivalents at beginning of period $                1,130 Cash and cash equivalents at end of period $                1,780

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