Question

$10,000 $ 4,000 300 400 2,400 7,100 2,900 (1,160) $ 1,740 Dec. 31, 2020 Dec. 31,2021 TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2021 ($ in thousands) Sales revenue Operating expenses: Cost of goods sold Depreciation expense Insurance expense General and administrative expense Total operating expenses Income before income taxes Income tax expense Net income Balance Sheet Information ($ in thousands) Assets: Cash Accounts receivable Inventory Prepaid insurance Equipment Less: Accumulated depreciation Total assets Liabilities and Shareholders' Equity: Accounts payable Accrued liabilities (for general & administrative expense) Income taxes payable Notes payable (due 12/31/2022) Common stock Retained earnings Total liabilities and shareholders' equity $ 420 780 730 110 2,700 (960) $ 3,780 $ 260 890 660 50 2,100 (660) $ 3,300 $ 420 460 $ 330 330 230 1,160 1,020 710 $ 3,780 210 900 860 450 $ 3,300 Required: Prepare Tiger's statement of cash flows, using the indirect method to present cash flows from operating activities. (Hint: You will have to calculate dividend payments). (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)
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Answer 1

Solution

Tiger Enterprises
Cash Flow Statement
For the ended december 31, 2021
Cash Flow from Operating Activities:
Net Income		$          1,740.00
Add: Adjustments to reconcile net income to net cash from operating activities
Depreciation expense	$              300.00
Change in operating assets and liabilities
Increase in prepaid insurance	$              (60.00)
Decrease in Accounts Payable	$              (90.00)
Decrease in Accounts receivables	$              110.00
Increase in Inventory	$              (70.00)
Increase in income tax payable	$                20.00
Decrease in other expenses payable	$            (130.00)
		$                80.00
A. Cash Flow from Operating Activities		$          1,820.00
Cash Flow from Investing Activities:
Purchase of Equipment	$            (600.00)
B. Cash flow from Investing Activities		$           (600.00)
Cash Flow from Financing Activities:
Issue of Common Stock	$              160.00
Dividend paid	$        (1,480.00)
Proceeds from notes payable	$              260.00
C. Cash Flow from Financing Activities		$       (1,060.00)
Increase (Decrease) in cash [A+B+C]		$             160.00
Cash January 1		$             260.00
Cash December 31		$             420.00

..Working note

Calculation of dividend paid
Beginning balance of retained earnings	$             450.00
Add: Net income	$         1,740.00
	$         2,190.00
Less: Ending balance of Retained earnings	$             710.00
Dividends paid in cash	$         1,480.00