Question

The income statement and additional data of Newton Travel Products, Inc., follow: (Click the icon to view the income statement.) (Click the icon to view the additional data. Requirements 1. Prepare Newton's statement of cash flows for the year ended December 31, 2018, using the indirect method. 2. Evaluate the company's cash flows for the year. In your evaluation, mention all three categories of cash flows and give the rationale for your evaluation. Requirement 1. Prepare Newton's statement of cash flows for the year ended December 31, 2018, using the indirect method. Start by completing the cash flows from operating activities. Then complete each section of the statement of cash flows, including the noncash investing and financing activities. (Use parentheses or a minus sign for numbers to be subtracted and for a net decrease in cas * Data Table - X Newton Travel Products, Inc. Statement of Cash Flows (Indirect Method) Year Ended December 31, 2018 Cash flows from operating activities: Newton Travel Products, Inc. Income Statement Year Ended December 31, 2018 Adjustments to reconcile net income to net cash provided by used for) operating activities: Revenues: Service revenue $ 280,000 8,400 $ 288,400 Dividend revenue Expenses: Cost of goods sold Salary expense Depreciation expense Advertising expense Interest expense Net cash provided by (used for) operating activities 104,000 59,000 35,000 4,400 2,600 13,000 $ Income tax expense 218,000 70,400 Net income Choose from any list or enter any number in the input fields and then click Check Answer.

Answer 1

Cash Flow Statement
Indirect Method
Cash flow from Operating Activities
Net Income		$      70,400.00
Adjustments
Depreciation	$      35,000.00
Change In current assets & Liabilities
Decrease in Accounts Receivable	$      17,000.00			=58000-41000
Increase in inventories	$       -1,000.00			=59000-60000
Increase in Prepaid Expenses	$       -1,200.00			=8300-9500
Increase in Accounts payable	$      19,000.00			=30000-11000
Increase in Accrued Liabilities	$      58,000.00			=82000-24000
Total Adjustments		$ 1,26,800.00
Cash from operating activities			$    1,97,200.00
Cash flow from Investing Activities
Cash paid for acquisition of Plant Assets		$ -1,60,000.00
Sale of Land		$      48,000.00
Cash used in investing activities			$   -1,12,000.00
Cash flow from Financing Activities
Issue of Common stock		$      36,000.00
Payment of Long term notes payable		$    -17,000.00
Dividend Paid		$    -12,000.00
Cash from financing activities			$          7,000.00
Net Increase in cash			$        92,200.00
Opening Balance of Cash			$        72,800.00
Closing Balance of Cash			$     1,65,000.00
Non Cash Investing and Financing Activities
Issue notes payable for acquisition of plant assets		$      54,000.00