Net income for the year was $105,000. Dividends of $90,000 cash were declared an

Question

Net income for the year was $105,000.

Dividends of $90,000 cash were declared and paid.

Scoreteck’s only noncash expense was $75,000 of depreciation.

The company purchased plant assets for $75,000 cash.

Notes payable of $25,000 were issued for $25,000 cash.

SCORETECK CORPORATION Spreadsheet for Statement of Cash Flows-Indirect Method For Year Ended December 31, 2017 Dec. 31, Analysis of Changes Dec. 31, 2016 Debit Credit 2017 Balance Sheet-Debit Bal. Accounts Cash Accounts receivable Inventory Plant assets 95,000 125,000 260,000 605,000 1,085,000 70,000 200,000 235,000 680,000 $ 1,185,000 Balance Sheet-Credit Bal. Accounts Accumulated depreciation Accounts payable Notes payable Common stock Retained earnings 105,000 160,000 375,000 205,000 240,000 1,085,000 180,000 145,000 400,000 205,000 255,000 $ 1,185,000 Statement of Cash Flows Operating activities Investing activities Financing activities

Explanation / Answer

Scoreteck Corporation Spread sheet for statement of cashflows- Indirect Method For year ended December 1 2017 Dec 31 2016 Analysis of changes Dec 31 2017 Debit Credit Balance Sheet - Debit Bal Accounts Cash 95000 70000 Accounts Receivables 125000 75000 200000 Inventory 260000 25000 235000 Plant Assets 605000 75000 680000 1085000 1185000 Balance Sheet Credit balance Accounts Accumulated depriciation 105000 75000 180000 Accounts payables 160000 15000 145000 NotesPayable 375000 25000 400000 Common Stock 205000 205000 Retained Earnings 240000 90000 105000 255000 1085000 1185000 Statement of cash flows Operating Activities Net Income 105000 Depriciation Expense 75000 Increase In accounts receivable 75000 Decrease in merchandise inventory 25000 Decrease in accounts payable 15000 Investing Activities Cash paid to purchase plant assets 75000 Financing activities Cash paid for dividends 90000 Cash received from notes payable 25000 485000 485000

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