As of December 31 2017 2016 Assets Cash Accounts receivable Merchandise inventor

Question

As of December 31 2017 2016 Assets Cash Accounts receivable Merchandise inventory Prepaid rent Equipment Accumulated depreciation Land $ 6,300 48,400 7,260 56,000 2,140 140,000 144,000 (73,400) (118,000) 50,000 10,200 45,200 700 116,000 Total assets $245,000 189,800 Liabilities Accounts payable (inventory)37,200 40,000 10.600 Salaries payable 12.200 Stockholders' equity Common stock, $50 par value Retained earnings 150,000 120,000 19,200 45,600 Total liabilities and equity $245,000 $189,800 Income Statement For the Year Ended December 31, 2017 Sales Cost of goods sold $ 480,000 (264,000) 216,000 (11,400) (7,000) Gross profit Operating expenses Rent expense Salaries expense Other operating expenses (95,200) (76,000) Net income S 26,400 Other Information 1. Purchased land for $66,000. 2. Purchased new equipment for $62,000 3. Sold old equipment that cost $66,000 with accumulated depreciation of $56,000 for $10,000 cash. 4. Issued common stock for $30,000 Required Prepare the statement of cash flows for 2017 using the indirect method. (Amounts to be deducted should

Explanation / Answer

Statement of cash flows for 2017 Net Income 26400 Add : Depreciation 11400 Operating cash flow before working capital changes 37800 Increase in Accounts Receivable -2940 Decrease in Inventory 10800 Decrease in Prepaid Rent 1440 Decrease in Accounts payable -2800 Increase in salary payable 1600 Equipment Cash from Operating Activities A 45900 Beg. Bal 144000 sale 66000 Financing Activites Issuance of common stock 30000 Purchase 62000 End. Bal 140000 Cash flow from Financing Activites B 30000 206000 206000 Accumulated Depreciation Investing Activities Sale 56000 Beg. Bal 118000 sale of equipment 10000 Dep 11400 Purchase of equipment -62000 Purchase of Land -66000 End. Bal. 73400 Cash flow from Investing Activites C -118000 129400 129400 Net cash flow from All activites A+B+C -42100 Add : Opening cash balance 48400 Ending Cash balance 6300 We appreciate the rating of our answers Thank You

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