Exercise 11-10 Prepare a statement of cash flows-indirect method (LO11-2, 11-3)
ID: 2437240 • Letter: E
Question
Exercise 11-10 Prepare a statement of cash flows-indirect method (LO11-2, 11-3) The balance sheet for Plasma Screens Corporation, along with additional information, are provided below PLASMA SCREENS CORPORATION Balance Sheets December 31, 2018 and 2017 2018 2017 Assets Current assets Cash Accounts receivable Inventory Prepaid rent $ 151,300 $ 166,800 89,000 74,600 1,400 75,600 89,000 2,800 Long-term assets Land Equipment Accumulated depreciation 450,000 640,000 (412,000) (256,000) 450,000 744,000 Total assets $1,100,700 $1,165,800 Liabilities and Stockholders' Equity: Current liabilities Accounts payable Interest payable Income tax payable $ 93,000 $ 79,600 13,800 4,400 6,900 6,800 Long-term liabilities Notes payable 15,000 230,000 Stockholders' equity: Common stock Retained earnings 670,000 209,000 670,000 168,000 Total liabilities and stockholders' equity $1,100,700 $1,165,800 Additional Information for 2018 1. Net income is $63,000 2. The company purchases $104,000 in equipment. 3. Depreciation expense is $156,000 4. The company repays $115,000 in notes payable 5 .The company declares and pays a cash dividend of $22,000Explanation / Answer
Statement of cash flow (indirect method) :
Cash flow from operating activities Net income 63000 Adjustment to reconcile net income to cash flow from operating activities Depreciation expense 156000 Decrease account receivable 13400 Increase inventory -14400 Increase prepaid rent -1400 Increase account payable 13400 Decrease interest payable -6900 Increase income tax payable 2400 162500 Net cash flow from operating activities 225500 Cash flow from investing activities Purchase of equipment -104000 Net cash flow from investing activities -104000 Cash flow from financing activities Repaid notes payable -115000 Dividend paid -22000 Net cash flow from financing activities -137000 Net cash flow -15500 Cash at the beginning of the period 166800 Cash at the end of the period 151300Related Questions
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