Below is a condensed Income Statement for the SPECTRE Company for 2018 along wit
ID: 2397951 • Letter: B
Question
Below is a condensed Income Statement for the SPECTRE Company for 2018 along with balance sheet information income statement service revenue 3,660,000 Operating expenses 2,700,000 income b4 income tax 960,000 Income tax expense 288,000 Net income 672,000 Balance sheets 12/31/2018 12/31/2017 Cash 1,317,000 270000 1,047,000 accounts receivable 480,000 360,000 Wages payable 330,000 240,000 Income taxes payable 90,000 165,000 Additional information a) During the year Sprectre issued common stock for $420,000 b) Long-term investments were sold by Spectre during the year for $210,000. Spectre had originally purchased the investments for $210,000 c) During the year Spectre paid cash dividends of $300,000 to its owners d) Spectre has no outstanding debt except for those listed in the partial balance sheet e) Operating expenses include $150,000 in depreciation expense REQUIRED: PREPARE A 2018 CASH FLOW STATEMENT FOR SPECTRE. Below is a condensed Income Statement for the SPECTRE Company for 2018 along with balance sheet information income statement service revenue 3,660,000 Operating expenses 2,700,000 income b4 income tax 960,000 Income tax expense 288,000 Net income 672,000 Balance sheets 12/31/2018 12/31/2017 Cash 1,317,000 270000 1,047,000 accounts receivable 480,000 360,000 Wages payable 330,000 240,000 Income taxes payable 90,000 165,000 Additional information a) During the year Sprectre issued common stock for $420,000 b) Long-term investments were sold by Spectre during the year for $210,000. Spectre had originally purchased the investments for $210,000 c) During the year Spectre paid cash dividends of $300,000 to its owners d) Spectre has no outstanding debt except for those listed in the partial balance sheet e) Operating expenses include $150,000 in depreciation expense REQUIRED: PREPARE A 2018 CASH FLOW STATEMENT FOR SPECTRE.Explanation / Answer
Spectre Company
Statement of Cash Flows
For the year ended December 2018
Net Income
$ 672,000.00
Adjustments
Depreciation and amortization
$ 150,000.00
Cash Provided by Operating Assets and Liabilities
Increase in Accounts Receivable
-$ 120,000.00
Increase in wages payable
$ 90,000.00
Decrease in income taxes payable
-$ 75,000.00
Net Cash provided (used) by operating activities
$ 717,000.00
Cash Provided from Investing Activities
Sale of long term investments
$ 210,000.00
Net Cash provided (used) by investing activities
$ 210,000.00
Cash Provided from Financing Activities
Issue of common stock
$ 420,000.00
Payment of cash dividends
-$ 300,000.00
Net Cash provided (used) by financing activities
$ 120,000.00
Net Cash Flow
$ 1,047,000.00
Cash and cash equivalents at the beginning of year
$ 270,000.00
Cash and cash equivalents at the end of year
$ 1,317,000.00
Spectre Company
Statement of Cash Flows
For the year ended December 2018
Net Income
$ 672,000.00
Adjustments
Depreciation and amortization
$ 150,000.00
Cash Provided by Operating Assets and Liabilities
Increase in Accounts Receivable
-$ 120,000.00
Increase in wages payable
$ 90,000.00
Decrease in income taxes payable
-$ 75,000.00
Net Cash provided (used) by operating activities
$ 717,000.00
Cash Provided from Investing Activities
Sale of long term investments
$ 210,000.00
Net Cash provided (used) by investing activities
$ 210,000.00
Cash Provided from Financing Activities
Issue of common stock
$ 420,000.00
Payment of cash dividends
-$ 300,000.00
Net Cash provided (used) by financing activities
$ 120,000.00
Net Cash Flow
$ 1,047,000.00
Cash and cash equivalents at the beginning of year
$ 270,000.00
Cash and cash equivalents at the end of year
$ 1,317,000.00
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