Problem 17-09A Condensed financial data of Cheng Inc. follow. CHENG INC. Comparative Balance Sheets December 31...

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Problem 17-09A Condensed financial data of Cheng Inc. follow. CHENG INC. Comparative Balance Sheets December 31 Assets 2020 C

$391,900 CHENG INC. Income Statement For the Year Ended December 31, 2020 Sales revenue Less: Cost of goods sold $135,900 Ope

CHENG INC. Statement of Cash Flows Adjustments to reconcile net income to Irinh Ra Division of lohn Wales

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Answer 1

Answer #1

CHENG INC.
Cash Flow Statement Indirect Method
For the Year Ended December 31, 2020
Particulars	Amount	Amount
*Cash Flow from Operating Activities*
Net profit before taxation (176700+26300)	$ 203,000

Add: Depreciation expense	$ 29,500
Add: Interest Expense	$ 4,400
Add: Loss on disposal of plant asset	$ 7,500
Operating Profit Before Working Capital Changes	$ 244,400


Less: Increase in Accounts Receivables	$ (59,400)
Less: Increase in Inventory	$ (10,100)
Less: Increase in Prepaid expenses	$ (3,400)
Add:Increase in Accounts Payable	$ 43,400
Less:Decrease in Accrued Expenses payable	$ (900)
Cash Generated from Operations	$ 214,000
Less: Income Tax Paid	$ (26,300)
Net Cash Generated from Operating Activities		$ 187,700

*Cash Flow from Investing Activities*
New Equipment Purchased for Cash	$ (79,400)
Sale of Old Equipment for Cash	$ 12,900
Purchase of Investments	$ (27,500)
Net Cash Used in Investing Activities		$ (94,000)

*Cash Flow from Financing Activities*
Matured bonds paid in cash	$ (38,800)
Cash Dividend paid	$ (25,600)
Issue of Common Stock	$ 45,300
Interest Expense	$ (4,400)
Net Cash Used in financing Activities		$ (23,500)

Net Increase/Decrease in Cash and Cash Equivalents		$ 70,200

Cash and Cash Equivalent at the Beginning of the year		$ 47,800

Cash and Cash Equivalent at the End of the year		$ 118,000

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