Exercise 5-14 The comparative balance sheets of Indigo Inc. at the beginning and

Question

Exercise 5-14 The comparative balance sheets of Indigo Inc. at the beginning and the end of the year 2017 are as follows INDIGO INC. BALANCE SHEETS Dec. 31, 2017 Jan. 1, 2017 Inc./Dec. Assets Cash Accounts receivable Equipment Less: Accumulated Depreciation-Equipment $46,760 94,360 42,360 20,360 $163,120 $ 14,760 89,600 23,600 11,000 $116,960 $32,000 Inc. 4,760 Inc 18,760 Inc. 9,360 Inc. Total Accounts payable Common stock Retained earnings $23,360 101,760 38,000 $163,120 16,600 81,600 18,760 $116,960 6,760 Inc. 20,160 Inc. 19,240 Inc. Total Net income of $47,360 was reported, and dividends of $28,120 were paid in 2017. New equipment was purchased and none was sold Prepare a statement of cash flows for the year 2017. (Show amounts that decrease cash flow with either a -sign e.g.-15,000 or in parenthesis e.g. (15,000).) INDIGO INC. Statement of Cash Flows

Explanation / Answer

INDIGO INC Cash Flow Statement For year ended 31 December 2017 Cash flows from operating activities Net Income $   47,360 Adjustment to reconcile net income to: Depreciation expense $      9,360 Changes in current operating assets and liabilities Increase in accounts receivable $   (4,760) Increase in accounts payable $      6,760 $   11,360 Net cash provided by operating activities $   58,720 Cash flows from investing activities purchase of equipment $ (18,760) Net cash used by investing activities $ (18,760) Cash flows from financing activities Cash received from stock issuance $   20,160 Dividend paid $ (28,120) Net cash provided by financing activities $   (7,960) Net increase in cash and cash equivalents $   32,000 Cash and cash equivalents at beginning of period $   14,760 Cash and cash equivalents at end of period $   46,760

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