3 (30 pts). The income statement and additional data of Dreampark International,
ID: 2584532 • Letter: 3
Question
3 (30 pts). The income statement and additional data of Dreampark International, Inc, follow: DREAMPARK INTERNATIONAL, INC Income Statement Year Ended June 30, 2016 Revenues: $215,000 Service Revenue Cost of goods sold Salary expense Depreciation expense Income tax expense $78,000 49,000 15,000 5,600 147,600 $ 67,400 Additional data: a. Acquisition of plant assets is $109,000. Of this amount, $70,000 is paid in cash and $39,000 by signing a note payable. b. Cash receipt from sale of land totals $28,000. There was no gain or loss. c. Cash receipts from issuance of common stock total $20,000. d. Payment of note payable is $39,000. e. Payment of dividends is $15,000. f. From the balance sheet: June 30 2016 2015 Current Assets: $20400 $11,000 56,000 48,000 83,000 Cas Account receivable... Inventory.... Accounts payable. 90,000 Current Liabilities: $31,000 $26,000 Accrued liabilities. Requirement Prepare Freampark International, Inc.'s statement of cash flows for the year ended June 30, 2016, using the indirect method. Include a separate section for noncash investing and financing activities.Explanation / Answer
Cash flow indirect method Cash flow from operating activities Cash flow from Financing activities Net income 67400 Common stock 20000 Adjustments to reconcile the net income notes payable -39000 Depreciation expense 15000 Cash dividend -15000 Changes in current asset and liabilities Decrease in accounts receivable 8000 Increase in Inventory -7000 Cash flow from Financing activities -34000 Increase in accounts payable 5000 Net Cash and cash equivalent 9400 Decrease in Accrued liabilities -3000 Add Beginning cash and cash equivalent 11000 Ending cash and cash equivalent 20400 18000 Cash flow from operating activities 85400 Cash flow from Investing activities Sales of land 28000 Purchase of plant asset -70000 Cash flow from Investing activities -42000
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