Question

How do you do both the indirect and direct method on this

L04-8 Presented below is the 2021 income statement and comparative balance sheet information for Tiger Enterprises. Open font size menu TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2021 $ 7.000 210 ($ in thousands) Sales revenue Operating expenses: Cost of goods sold Depreciation expense Insurance expense General and administrative expense Total operating expenses Income bcforc income taxes Income lax expense Net income 100 1,800 5500 1.500 (600) 900 $ Balance Sheet Information ($ in thousands) Dec 31, 2021 Dec. 31, 2020 300 $ 750 200 830 600 640 Assets: Cash Accounts receivable Inventory Prepaid insurance Equipment Less: Accumulated depreciation Tolal ussels 2.100 (810) $2.000 1,800 (600) $2,850 Liabilities and Shareholders' Lquity: 300 200 Accounts payable Accruedi liubilities for general & adinin, expense) Income taxes payable Notes payable (due 12/31/2022) Common stock Retained carnings Tolal liabilities and starelokiers'equily 800 $ 300 100 150 600 800 510 $ 2,850 JUU 500 $3,000 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).

Answer 1

TIGER ENTERPRISES
Cash Flow Statement (Indirect Method)
As of December 31, 2021
Cash flows from operating activities
Net Income		$      900
Adjustments to reconcile net income:
Depreciation expense	$    240
Decrease in accounts receivable	$       80
Increase in Inventory	$    (40)
Increase in Prepaid insurance	$    (30)
Decrease in accounts payable	$    (60)
Decrease in accrued liabilities	$ (100)
Increase in income tax payable	$       50
		$      140
Net cash provided by operating activities		$   1,040
Cash flows from investing activities
Purchase of equipment	$ (300)
Net cash used by investing activities		$    (300)
Cash flows from financing activities
Cash received from issuance of note	$    200
Cash received from issuance of common stock	$    100
Dividends paid	$ (940)		500-540-900
Net cash used in financing activities		$    (640)
Net increase in cash and cash equivalents		$      100
Cash and cash equivalents at beginning of period		$      200
Cash and cash equivalents at end of period		$      300

Under direct method, only cash flow from operating activities section will change.

TIGER ENTERPRISES
Cash Flow Statement (Direct Method)
As of December 31, 2021
Cash flows from operating activities
Cash received from customers	$    7,080		7000+830-750
Cash paid to suppliers	$ (3,460)		3360+360-300+640-600
Cash paid for insurance expense	$     (130)		100+50-20
Cash paid for general and administrative expense	$ (1,900)		1800+400-300
Cash paid for income tax expense	$     (550)		600+150-200
Net cash provided by operating activities		$   1,040

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