Prepare a statement of cash flows, using the indirect method,with the information which follows:
ABC Company reports the following comparative balance sheet:
ABC Company Balance Sheet Dec 2018/2017 Assets 2017 2018 Cash 37,000
54,000 Accounts Receivable 26,000 68,000 Inventory - 54,000 Prepaid expenses 6,000 4,000 Land 70,000 45,000 Buildings 200,000 200,000 Accumulated Depreciation - buildings (11,000) (21,000) equipment 68,000 193,000 Accumulated Depreciation - equipment (10,000) (28,000) total assets 386,000 569,000
In addition, ABC Company reports the following income statementitems:
SalesRevenue $890,000
COGS $465,000
Operating Expenses 221,000
Interest Expense 12,000
Loss on disposal of equip2,000 $700,000
Income Beforetaxes $190,000
Income TaxExpense $65,000
NetIncome $125,000
You are also given the following information:
Operating expenses include depreciation expense of $33,000
Land was sold at its book value ($25,000) for cash
Cash dividends of $55,000 were paid in 2018
Interest expense of $12,000 was paid in cash
Equipment with a cost of $166,000 was purchased for cash.Equipment with a cost of $41,000 and a book value of $36,000 wassold for $34,000 cash.
Bonds of $10,000 were redeemed at their face value for cash.Bonds of $30,000 were converted into common stock.
Common stock of $130,000 was issued for cash.
Prepare the statement of cash flows for ABC Company using theindirect method.
Calculate the free cash flows for ABC Company given the aboveinformation.
Prepare a statement of cash flows, using the indirect method,with the information which follows:
ABC Company reports the following comparative balance sheet:
| ABC Company | ||
| Balance Sheet | ||
| Dec 2018/2017 | ||
| Assets | 2017 | 2018 |
| Cash | 37,000 | 54,000 |
| Accounts Receivable | 26,000 | 68,000 |
| Inventory | - | 54,000 |
| Prepaid expenses | 6,000 | 4,000 |
| Land | 70,000 | 45,000 |
| Buildings | 200,000 | 200,000 |
| Accumulated Depreciation - buildings | (11,000) | (21,000) |
| equipment | 68,000 | 193,000 |
| Accumulated Depreciation - equipment | (10,000) | (28,000) |
| total assets | 386,000 | 569,000 |
In addition, ABC Company reports the following income statementitems:
SalesRevenue $890,000
COGS $465,000
Operating Expenses 221,000
Interest Expense 12,000
Loss on disposal of equip2,000 $700,000
Income Beforetaxes $190,000
Income TaxExpense $65,000
NetIncome $125,000
You are also given the following information:
Operating expenses include depreciation expense of $33,000
Land was sold at its book value ($25,000) for cash
Cash dividends of $55,000 were paid in 2018
Interest expense of $12,000 was paid in cash
Equipment with a cost of $166,000 was purchased for cash.Equipment with a cost of $41,000 and a book value of $36,000 wassold for $34,000 cash.
Bonds of $10,000 were redeemed at their face value for cash.Bonds of $30,000 were converted into common stock.
Common stock of $130,000 was issued for cash.
Prepare the statement of cash flows for ABC Company using theindirect method.
Calculate the free cash flows for ABC Company given the aboveinformation.
Related questions
The balance sheet for Plasma Screens Corporation, along with additional information, are provided below:
| PLASMA SCREENS CORPORATION Balance Sheets December 31, 2018 and 2017 | ||||
| 2018 | 2017 | |||
| Assets: | ||||
| Current assets: | ||||
| Cash | $ | 142,950 | $ | 154,000 |
| Accounts receivable | 76,800 | 90,500 | ||
| Inventory | 92,000 | 77,300 | ||
| Prepaid rent | 3,400 | 1,700 | ||
| Long-term assets: | ||||
| Land | 465,000 | 465,000 | ||
| Equipment | 762,000 | 655,000 | ||
| Accumulated depreciation | (421,000) | (262,000) | ||
| Total assets | $ | 1,121,150 | $ | 1,181,500 |
| Liabilities and Stockholders' Equity: | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 96,000 | $ | 82,300 |
| Interest payable | 6,750 | 13,500 | ||
| Income tax payable | 7,400 | 4,700 | ||
| Long-term liabilities: | ||||
| Notes payable | 112,500 | 225,000 | ||
| Stockholders' equity: | ||||
| Common stock | 685,000 | 685,000 | ||
| Retained earnings | 213,500 | 171,000 | ||
| Total liabilities and stockholders' equity | $ | 1,121,150 | $ | 1,181,500 |
Additional Information for 2018:
1. Net income is $66,000.
2. The company purchases $107,000 in equipment.
3. Depreciation expense is $159,000.
4. The company repays $112,500 in notes payable.
5 .The company declares and pays a cash dividend of $23,500.
Required:
Prepare the statement of cash flows using the indirect method.
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