LAG Network Inc.’s balance sheet and income statement are as follows: Additional

Question

LAG Network Inc.’s balance sheet and income statement are as follows:

Additional information regarding LAG Network Inc.’s activities during 2017:

a. Equipment is purchased for $20,000 cash.
b. 15,200 common shares are issued for cash at $2.50 per share.
c. Declared and paid $55,800 of cash dividends during the year.

Required:
Prepare a statement of cash flows for 2017 that reports the cash inflows and outflows from operating activities according to the indirect method. (List any deduction in cash and cash outflows as negative amounts.)

LAG Network Inc. Income Statement For Year Ended December 31, 2017   Sales $ 933,600   Cost of goods sold 561,200   Gross profit $ 372,400   Operating expenses:      Depreciation expense $   25,200      Other expenses 241,800         Total operating expenses 267,000   Profit from operations $ 105,400   Income taxes 23,600   Profit $ 81,800

Explanation / Answer

Answer:-

LAG Network Inc Statement of Cash Flow (Using Indirect Method) For the year ended December 31, 2017 Particulars Amount $ Cash flow from opreating activities Net Income 81800 Adjustments to reconcile net income to net cash provided by opreating activities Adjustment for non cash effects Depreciation 25200 Change in opreating assets & liabilities Increase in accounts receivable -8800 Increase in inventory -23360 Decrease in accounts payable -12600 Increase in Income taxes payable 1400 Net cash flow from opreating activities (a) 63640 Cash Flow from Financing activities Cash Dividend paid -55800 Common stock issued 38000 Net cash Flow from Financing activities (b) -17800 Cash Flow from Investing activities Equipment purchased -20000 Net cash Flow from Investing activities (c) -20000 Net Channge in cash c=a+b+c 25840 Beginning cash balance 55400 Closing cash balance 81240

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.