Presented below is the 2018 income statement and comparative balance sheet infor

Question

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) $14,500 Sales revenue Operating expenses: $ 4,900 390 850 3,300 Cost of goods sold Depreciation Insurance Administrative and other Total operating expenses Income before income taxes Income tax expense Net income 9,440 5,060 2,024 3,036 Balance Sheet Information ($ in thousands) Assets Cash Accounts receivable Inventory Prepaid insurance Plant and equipment Dec. 31,2018 Dec. 31, 2017 $ 600 825 795 120 3,100 $350 980 750 2, 550 Less: Accumulated depreciation (1,140) (758) Total assets $ 4,300 $ 3,910 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 $ 375 375 355 1,320 1,080 795 $ 510 550 300 900 950 700 Total liabilities and shareholders' equity $ 4,300 $ 3,910 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

Explanation / Answer

TIGER ENTERPRISES Statement of Cash flows for the year ended December 31,2018 ($ in thousands) Cash flow from Operating activities Net Income $3,036 Adjustments to Net Income Depreciation $390 Decrease in Accounts Receivables $155 Increase in Inventory -$45 Increase in Prepaid insurance -$90 Decrease in Accounts Payable -$135 Decrease in Payable for administrative and other exp. -$175 Increase in Income Tax Payable $55 $155 Net cash provided by Operating activities $3,191 Cash flow from Investing activities Purchase of Plant and equipment -$550 Net cash used for Investing activities -$550 Cash flow from Financing activities Issue of Common stock $130 Issue of note payable $420 Dividend paid -$2,941 Net Cash used by financing activities -$2,391 Net Cash surplus / (deficit) $250 Add : Cash balance as on 31/12/17 $350 Cash balance as on 31/12/18 $600

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