The balance sheet for Plasma Screens Corporation, along with additional informat

Question

The balance sheet for Plasma Screens Corporation, along with additional information, are provided below:

Additional Information for 2018:

1. Net income is $78,000.

2. The company purchases $111,000 in equipment.

3. Depreciation expense is $151,000.

4. The company repays $117,500 in notes payable.

5 .The company declares and pays a cash dividend of $29,500.

Required:

Prepare the statement of cash flows using the indirect method.

PLASMA SCREENS CORPORATION
Balance Sheets
December 31, 2018 and 2017 2018 2017   Assets:   Current assets:       Cash $ 113,450    $ 134,600          Accounts receivable 81,600    96,500          Inventory 104,000    88,100          Prepaid rent 5,800    2,900      Long-term assets:       Land 525,000    525,000          Equipment 826,000    715,000          Accumulated depreciation (437,000)   (286,000)             Total assets $ 1,218,850    $ 1,276,100      Liabilities and Stockholders' Equity:   Current liabilities:       Accounts payable $ 108,000    $ 93,100          Interest payable 7,050    14,100          Income tax payable 9,800    5,900      Long-term liabilities:       Notes payable 117,500    235,000      Stockholders' equity:       Common stock 745,000    745,000          Retained earnings 231,500    183,000             Total liabilities and stockholders' equity $ 1,218,850    $ 1,276,100   

Explanation / Answer

Statement of Cash Flow Particulars Amount Total Amount Income             78,000.00 Depreciation          151,000.00 Decrease in AR             14,900.00 Increase in inventory          (15,900.00) Increase in prepaid rent             (2,900.00) Increase in AP             14,900.00 Decrease in interest payable             (7,050.00) Increase in income taxes payable               3,900.00 Cash flow from operating activities                     236,850.00 Cash flow from Investing activities Purchase of equipment        (111,000.00) Cash flow from Investing activities                   (111,000.00) Cash flow from Financing activities Notes Repaid        (117,500.00) Dividends Paid          (29,500.00) Cash flow from Financing activities                   (147,000.00) Opening cash and cash equivalents                     134,600.00 Closing cash and cash equivalents                     113,450.00

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