Question

please include T-accounts and the steps

Comparative Balance Sheets At 12-31-18 At 12-31-17 Income Statement For period 01-01-18 to 12-31-18 Assets Cash Accounts Receivable Inventory Prepaid Expenses Equipment Accum Depreciation Total Assets 515,000 195,000 320,000 $ 52,000 $ 22.000 6 16,000 S 4,000 $ 305,000 $ (15,000 $ 384.000 40,000 27.000 12.000 2,000 240,000 (10,000) 311.000 Sales COGS Gross Profit Operating Expenses Depreciation Expense Other Expenses Total Operating Expenses Income Before Taxes Income Tax Expense Net Income $ $ 5,000 170.000 $ 175,000 145,000 48.000 97.000 Liabilities & SE Accounts payable Income Tax Payable Common Stock Retained Earnings Total Liabilities & SE 30,000 $ 7,000 $ 186,000 $ 161,000 $ 384.000 $ 20,000 10,000 176,000 105,000 311.000 Given: Sales are all on credit and Merchandise Inventory are all purchased on credit. Only one piece of equipment was purchased during the year; no equipment was sold. Retained Earnings was affected only by Net Income and Dividends paid. REQUIRED: 1. How much cash inflow is generated from sales on collection of Accounts Receivable? 2. How much cash was paid to suppliers for Merchandise inventory? 3. How much cash dividends did the company pay out to its shareholders in 2018 - 4. Using the Indirect Method of determining Cash Flows, determine the Net Cash Provided by Operating Activities.

Answer 1

Answer is given below with T accounts to the right side

1 Amount of cash received from Customers Sales Add: Decrease in Accounts receivable Net cash received from customers $515,000 $5,000 $520,000 opening balance Sales Accounts Receivable $27,000 $515,000 Cash collected closing balance $542,000 $520,000 $22,000 $542,000 2 payment to suppliers Cost of Goods sold Add: Increase in inventory Less: Increase in Accounts payable Cash paid for Suppliers $195,000 $4,000 -$10,000 $189,000 To cash paid Accounts Payable $189,000 Opening Balance Purchases $30,000 Inventory 3 Dividend paid Opening balance of Retained earnings Add: Net Income $20,000 $195,000 $4,000 Closing balance $105,000 $97,000 $202,000 $161,000 $41,000 $219,000 $219,000 Less: Closing balance of Retained earnings Dividend paid opening balance Inventory Inventory $12,000 $4,000 Closing balance $16,000 $16,000 $16,000 Cash flow from Operating activities (indirect method) For the year ended December 2018 Cash flows from Operating Activities Net Income $97,000 Add: Adjustments to reconcile net income to Depreciation $5,000 Changes in Working Capital Decrease in Accounts Receivable $5,000 Increase in Inventory -$4,000 Increase in Prepaid expanses -$2,000 Increase in Account payable $10,000 Decrease in Income tax payable $3,000 Net Cash provided by Operating Activities I $108,000 Retained earnings Opening balance $41,000 Net Income $161,000 $202,000 $105,000 $97,000 Dividend paid Closing balance $202,000