Great Adventures Problem 11-1 The income statement, balance sheet, and additiona

Question

Great Adventures Problem 11-1 The income statement, balance sheet, and additional information for Great Adventures, Inc., are provided below GREAT ADVENTURES, INC. Income Statement For the Year Ended December 31, 2017 Revenues: Service revenue (clinic, racing, TEAM) Sales revenue (MU watches) $539,000 114,000 lotal revenues $ 653,000 Expenses. Cost of goods sold (watches) Operating expenses Depreclation expense Interest expense Income tax expense 68,000 304,076 48,000 29,524 55,800 Total expenses 505,400 Net income $147,600

Explanation / Answer

Working Note

Cash Flows from Operating Activities Amount Net Income 147600 Adjustments for non cash effects Depreciation Expense 48000 Income Tax Expense 55800 Changes in Current Assets and Current Liabilities Increase in Accounts receivable -9000 Increase in Inventory -2900 Increase in Other Current Assets -1900 Increase in Accounts payable 2900 Cash Generated from operations 240500 Taxes Paid -37000 Cash Flows from Operating Activities 203500 Cash Flows from Investing Activities Land Purchased -500000 Building Purchased -1000000 Cash Flows from Investing Activities -1500000 Cash Flows from Financing Activities Borrowing Net 480000 Paid -37620 Issued Coommon Stock 1200000 Dividend Paid -114500 Purchase treasury Stock -143000 Reissued Treasury Stock 77000 Cash Flows from Financing Activities 1461880 Increase / Decrease in Cash 165380 Cash at the beginning of the period 136000 Cash at the end of the period 301380

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