The controller of Infinity Stone Corporation has provided you with the following
ID: 2609773 • Letter: T
Question
The controller of Infinity Stone Corporation has provided you with the following information:
Infinity Stone Corporation
Income Statement
For the Year Ended December 31, 2018
Net sales
$620,000
Operating expenses
410,000
Income from operations
210,000
Other revenues and expenses
Gain on sale of equipment $30,000
Interest expense 8,000
$22,000
Income before income taxes
232,000
Net income
Infinity Stone Corporation
Comparative Account Information
Relating to Operations
For the Year Ended December 31, 2018
2018 2017
Accounts receivable $56,000 $40,000
Prepaid insurance 5,000 6,000
Accounts payable 59,000 47,000
Interest payable 600 1,500
Income taxes payable 4,200 6,000
Unearned revenue 20,000 14,000
Required
1. Prepare a statement of cash flows (for operating activities only) for the year ended December 31, 2018, using the indirect method.
Net sales
$620,000
Operating expenses
410,000
Income from operations
210,000
Other revenues and expenses
Gain on sale of equipment $30,000
Interest expense 8,000
$22,000
Income before income taxes
232,000
Explanation / Answer
Note: Taxes and net income figures is missing in this question. It was assumed that provision for income tax for 2018 is $6,000 and income tax of 2017 amounting $4,200 was paid in 2018.
Infinity Stone Corporation - Cash flow from operating activities -31.12.2018 Particulars Details Amount Cash flow from Operating Activites: Income from operations $210,000.00 Adjustment to reconcile net income to net cash provided by operating activities: Increase in accounts receivables -$16,000.00 Increase in prepaid insurance -$1,000.00 Decrease in unearned revenue -$6,000.00 Decrease in accounts payable -$12,000.00 Income tax paid -$4,200.00 Net cash provided by operating activities $170,800.00Related Questions
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