Question

The balance sheets for Plasma Screens Corporation, along with additional information, are provided below: 2020 $ 159,000 89,500 75,500 1,500 PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 2021 Assets Current assets: Cash $ 146,750 Accounts receivable 76,000 Inventory 90,000 Prepaid rent 3,000 Long-term assets: Land 455,000 Equipment 750,000 Accumulated depreciation (415, 000) Total assets $1,105,750 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 94,000 Interest payable 6,750 Income tax payable 7,000 Long-term liabilities: Notes payable 112,500 Stockholders' equity: Common stock 675,000 Retained earnings 210,500 Total liabilities and $1,105,750 stockholders' equity 455,000 645,000 (258,000) $1,167,500 $ 80,500 13,500 4,500 225,000 675,000 169,000 $1,167,500 Additional Information for 2021: 1. Net income is $64,000. 2. The company purchases $105,000 in equipment. 3. Depreciation expense is $157,000. 4. The company repays $112,500 in notes payable. 5. The company declares and pays a cash dividend of $22,500.

Answer 1

$ 64,000 Cash flows from Operating Activties Net Income Adjustments to reconcile net income to net Cashflows from Operating activities Add: Depreciation Expenses Decrease in Accounts Receivable Increase in Inventory Increase in Prepaid Rent Increase in Accounts Payable Decrease in Interest Payable Increase in Income Tax payable Net Cash flows from Operating activities - A Cash flows from Investing activities Purchase of Equipment Cash paid for Notes payable Net Cash flows from Investing activities - B Cash flows from Financing activities Dividend paid in Cash Net Cash flows from Financing activities -C $ 1,57,000 $ 13,500 $ -14,500 $ -1,500 $ 13,500 $ -6,750 $ 2,500 $ 2.27,750 | $ -1,05,000 $ -1,12,500 $ -2,17,500 $ $ -22,500 -22,500 Net Cash flow(A+B+C) Add:Opening Cash Balance Closing Cash balance S -12,250 S 1,59,000 $ 1,46,750