Condensed financial data of Indigo Corporation follow. Indigo Corporation Compar
ID: 2590082 • Letter: C
Question
Condensed financial data of Indigo Corporation follow.
Indigo Corporation
Comparative Balance Sheets
December 31
Assets
2017
2016
Cash
$ 161,600
$ 96,800
Accounts receivable
175,600
76,000
Inventory
225,000
205,700
Prepaid expenses
56,800
52,000
Long-term investments
276,000
218,000
Plant assets
570,000
485,000
Accumulated depreciation
(100,000
)
(104,000
)
Total
$1,365,000
$1,029,500
Liabilities and Stockholders’ Equity
Accounts payable
$ 204,000
$ 134,600
Accrued expenses payable
33,000
42,000
Bonds payable
220,000
292,000
Common stock
440,000
350,000
Retained earnings
468,000
210,900
Total
$1,365,000
$1,029,500
Indigo Corporation
Income Statement Data
For the Year Ended December 31, 2017
Sales revenue
$776,920
Less:
Cost of goods sold
$270,920
Operating expenses, excluding depreciation
24,820
Depreciation expense
93,000
Income tax expense
54,560
Interest expense
9,460
Loss on disposal of plant assets
15,000
467,760
Net income
$ 309,160
Additional information:
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Adjustments to reconcile net income to
Indigo Corporation
Comparative Balance Sheets
December 31
Assets
2017
2016
Cash
$ 161,600
$ 96,800
Accounts receivable
175,600
76,000
Inventory
225,000
205,700
Prepaid expenses
56,800
52,000
Long-term investments
276,000
218,000
Plant assets
570,000
485,000
Accumulated depreciation
(100,000
)
(104,000
)
Total
$1,365,000
$1,029,500
Liabilities and Stockholders’ Equity
Accounts payable
$ 204,000
$ 134,600
Accrued expenses payable
33,000
42,000
Bonds payable
220,000
292,000
Common stock
440,000
350,000
Retained earnings
468,000
210,900
Total
$1,365,000
$1,029,500
Explanation / Answer
Statement of cash flow :
Cash flow from operating activities Net income 309160 Adjustment to reconcile net income Depreciation expenses 93000 Loss on disposal of plant assets 15000 Increase account receivable (99600) Increase inventory (19300) Increase prepaid expenses (4800) Increase account payable 69400 Decrease accured expenses payable (9000) Net cash flow from operating activities 353860 Cash flow from investing activities Sale of equipment 3000 Purchase of equipment (200000) Purchase of investment (58000) Net cash flow from investing activites (255000) Cash flow from financing activities Bonds repaid (72000) Dividend paid (52060) Issue common stock 90000 Net cash flow from financing activities (34060) Net cash flow 64800 Beginning cash 96800 Ending cash 161600Related Questions
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