Question

Question 5 (20 marks) The comparative Balance Sheets and the Income statement for the Marine Corporation are as follow Marine Corporation Income Statement For the Year Ended December 31, 2019 Sales Less: Cost of Goods Sold Gross Profit Less: Selling, General & Administrative Expenses Operating profit $4,500,000 3,200,000 1,300,000 260,000 1,040,000 150,000 890,000 90,000 800,000 400,000 $ 400,000 Less: Depreciation Expense Earnings Before Interest and Taxes Less: Interest Expense Earings Before Taxes Less: Taxes (50%) Net Income Marine Corporation Assets Cash Marketable Securities Accounts Receivable Inventories Investments Total current assets Plant and Equipment Less Accumulated Amortization Net plant and Equipment Total Assets Balance Sheet 2018 $35,000 185,000 240,000 230,000 70,000 $760,000 1,300,000 450,000 2019 $40,000 170,000 220,000 275,000 55,000 $760,000 1,550,000 600,000 $850,000 1,610,000 $950,000 1,710,000 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $95.000 Notes payable 80.000 Accrued Expenses 30.000 Income Taxes Payable 5.000 Bonds Payable (2016) 800,000 Common Stock (100.000 shares) 200.000 Rolained Earnings 400.000 Total Llabilities and Shareholders S110.000 Equity $75,000 20.000 5,000 10,000 900,000 200,000 500.000 $1.7110.000 Required Prepare a statement of Cash Flows for the year ended December 31, 2019 using the Indirect Method showing the operating investing and financial cashflows up to the net change in cash.

Answer 1

Page 1 classmate Data Page Cash flow Statement for the year ended 31 Dec 2019 Indorent Method) Armount in ($) > cash flow from Operating ActinBest Net profit as pee Per Alc Adel, Depreciation Sponge 150.000 90,000 Tranfer to Retained Earrings /co,ooo 400,000 Intaient Expense 340,000 7407000 Add: Increase in Cunent liabilities on Decrease in lument Asset Decrare in Accounts Receivable 20,000 Decrare in Markable Securities 15000 Decrease in Investments 15000 501000 790.000 Lou Decnase in lusent liabidities on Increase in cauent Assets: Increase in Inventory 45000 Deenase in Accounts Payable 20000 Decrease in Notes Poyeuble 60,000 Decrose in needeed expense 25000 (150.000) 640,000 Les Income tax peid during the year (335000) Net Cash flow from operating 245000 Activities (A) - Cash flow from Investing Betriee Purchase of plant and Equipment (250,000) net cash floxo forom Investing Activities (B) Q50,000

Page 2 - 9 cassuste Date Page cash flow from financing Activides: Proceeds from Issue of bonds Interest Expense met each flow from financing Activities (c) Net Balance of Cach & Cach Equivalent 100,000 (90,ooo) 10,000 during the year [A + B + c] Add Opening Cash Balance closing Cach Balance 5000 35000 40,000 > Working totes :- Accumulated Depreciation Ale By Balance bld 450,000 By Theome statement 150,000 To Balance eld 600,000 600,000 600,000 Plant & Equipment Alc To Balance bold 13,00,000 To Cash (Blf) 250,000 Balance eld 1530,000 By 1530,000 1550,000 5000 Provision for Income Tax Alc To Cash Colt) 395000 By Balance ldd To Balonce old 10,000 Boj Income statement 400.000 405000 405000