Exercise 4-20 Statement of cash flows; indirect method [L04-8] Presented below i

Question

Exercise 4-20 Statement of cash flows; indirect method [L04-8] Presented below is the 2018 income statement and comparative balance sheet information for Tiger Enterprises TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2018 ($ in thousands) Sales revenue $15,500 Operating expenses: $5,100 410 950 3,500 Cost of goods sold Depreciation Insurance Administrative and other Total operating expenses Income before income taxes Income tax expense Net income 9,960 5,540 2,216 $ 3,324 Dec. 31, 2017 Balance Sheet Information ($ in thousands) Assets: Cash Accounts receivable Inventory Prepaid insurance Plant and equipment Dec. 31,2018 $ 640 835 825 140 3,300 1,180 $4,560 $ 370 1,000 770 40 2,650 770 $ 4,060 Less: Accumulated depreciation Total assets Liabilities and Shareholders' Equity: Accounts payable Payables for administrative and other expenses Income taxes payable Note payable (due 12/31/2019) Common stock Retained earnings $385 385 365 1,100 1,120 1,205 $ 4,560 $ 530 570 320 800 970 870 $ 4,060 Total liabilities and shareholders' equity Required: Prepare Tiger's statement of cash flows, using the indirect method to present cash flows from operating activities. (Hint: You will have to calculate dividend payments). (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)

Explanation / Answer

TIGER ENTERPRISES Statement of Cash flows For the year ended December 31, 2018 ($ in thousands) Cash flow from operating activities: Net Income $       3,324 Adkustments for noncash effects Depreciation expense               410 Changes in operating assets and liabilities Decrease in accounts receivable               165 Increase in inventory                -55 Increase in prepaid insurance             -100 Decrease in accounts payable             -145 Decrease in payable for adinistrative and other expense             -185 Increase in income tax payable                 45 Net Cash provided by operating activities         3,459 Cash flow from investing activities: Purchase of plant and equipment             -650 Net Cash used by investing activities           -650 Cash flow from financing activities: Issuance of notes payable               300 Issuance of common stock               150 Dividend paid          -2,989 Net Cash used by financing activities       -2,539 Net Increase in cash and cash equivalent            270 Cash at the beginning of the year            370 Cash at the end of the year            640 Working: Beginning retained Earning            870 Add:Net Inome         3,324 Less:Ending Retained Earning         1,205 Dividend Paid         2,989

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